Cuomo Veto Of Hit-And-Run Insurance Bill Irks Trial Lawyers
Law360, New York (December 18, 2012, 6:58 PM ET) -- Gov. Andrew Cuomo's
veto of legislation to have New York drivers buy more insurance for mishaps
including hit-and-run accidents sparked consternation Tuesday from trial
lawyers, who vowed to keep fighting for what they call a consumer-friendly measure.
The Democratic governor on Monday rejected the supplementary uninsured/underinsured
motorist coverage bill, which passed both houses of the Legislature in
Albany by wide margins in June.
The legislation would have forced millions of Empire State auto insurance
policyholders to opt out, instead of opting in, when deciding to buy levels
of extra coverage that go beyond the state's current required minimum
The bill would have seen more New Yorkers match the coverage they hold
to protect other drivers with higher levels of coverage — up to
$1 million and possibly more — to protect themselves.
But the opt-out provision was unpalatable to Cuomo, who is looking for
ways to make New York seem more business and consumer friendly and doesn't
want to impose additional costs.
"I will not add to the financial burdens already faced by New York's
consumers," a copy of the governor's memo said. "I will
not sign ... a law that places such an unacceptable choice on New Yorkers."
The governor's move drew a promise to fight for the bill in 2013 from
New York City-based malpractice attorney Michael E. Jaffe of Pazer Epstein
& Jaffe PC, the president of the New York State Trial Lawyers Association.
"Not a week goes by that an accident victim does not walk into a
law office somewhere in this state believing they are 'fully covered,'
only to learn that they did not purchase the one type of coverage that
would have protected themselves and their families for losses caused by
uninsured drivers or those with limited policies," Jaffe said.
A recent accident in which a Staten Island driver carrying the minimum
$25,000 in SUM coverage — but now facing far higher medical and
other costs after being stuck by a drunken, uninsured driver — has
raised the profile of the dispute, lawyers in favor of the legislation say.
"We will work with our lobbying team and the legislature in the upcoming
session to address the governor's objections and build an even broader
coalition of support for this legislation," Jaffe said.
But another powerful voice in Albany, the New York Insurance Association
Inc., which advocates for the property casualty insurers who write policies
for more than 9 million vehicles registered in the state, praised Cuomo's veto.
"The New York Insurance Association opposes any type of measure that
seeks to force consumers into purchasing insurance," said NYIA president
The NYIA also took trial lawyers to task.
"Policyholders were not advocating for this bill," Melchionni
said. "Trial lawyers were advocating for this bill with the desire
of increasing pain and suffering awards as these types of lawsuits are
what they thrive on."
Trial lawyers freely admit that such coverage could assist their clients
in winning recoveries but insist they are in favor of the bill because
it protects drivers, not their own pocket books.
They call the insurance industry's stance disingenuous, suggesting
insurers really are worried about writing policies that could cost them
money in the long run.
Insurers could potentially be worried about facing an increase in the number
— and value — of claims if policyholders have higher SUM limits
at their disposal, according to Dan Flanzig, managing partner of New York
- based Flanzig & Flanzig LLP.
Flanzig, who often represents injured cyclists, noted that auto insurance
supplemental coverage can protect pedestrians or cyclists injured, for
example, by an under-insured or hit-and-run taxi cab in New York City
— even if they're not driving a car.
"Such insurance would give them a chance to make a recovery if they
own a car and have the insurance," Flanzig said. "If you're
hit by somebody with minimal coverage, you have a chance to make a claim
on your own policy if you have the supplemental coverage."
Jaffe has also said that premiums tied to the mandatory minimum SUM coverage
of $25,000 amount to "free premiums" for insurers. That is because
in the vast majority of cases, the minimum coverage required by law is
offset by mandatory liability minimums typically held by the driver at
fault in an accident, he said.
The plaintiffs lawyers said Tuesday they believe Cuomo's veto was
based in the technical details of the legislation and say it can be fixed in 2013.
They took heart in the fact that Cuomo acknowledged the importance of
educating drivers about their option to buy extra coverage, referring
to the governor's comment that the Department of Financial Services
"will be exploring ways to increase consumer education on the benefits
of SUM coverage so consumers can make a more informed decision."
Lawmakers including state Sen. James L. Seward, a influential Oneonta,
N.Y., Republican who shepherded the legislation through the Senate this
year, believe the idea would likely come back up in Albany with a fix
for the opt-out provision.
"We'll take a look at the governor's objections and see how
they can be worked out," said Seward spokesman Jeff Bishop. "I
don't think it's the end of this legislation."
--Editing by John Quinn and Lindsay Naylor.
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