What’s the story behind New York’s supplemental spousal liability insurance?

What is supplemental spousal liability insurance?

Supplemental spousal liability insurance coverage sounds complicated, and it’s no wonder it’s making headlines. With this coverage, your bodily injury liability coverage can now be extended to your spouse if they’re injured in an accident where you’re found responsible. Without this coverage, your insurance could decline to pay what your spouse needs to recover from medical costs or other bills.

Supplemental spousal liability coverage is not actually new. It’s offered in a few different states and was previously available in New York State since 2002. In 2022, however, the New York State Legislature passed a bill changing the way this coverage is offered. Before this latest change, supplemental spousal liability coverage used to be opt-in for New York State residents and they were required to mail a letter to their insurance company requesting this coverage. This meant it wasn’t used very often or understood by consumers, even if they could have benefitted from it. In 2023, when the bill was signed into law by Governor Kathy Hochul, insurance companies were required to add this coverage to every policy, automatically, making it necessary for anyone who doesn’t want it to opt-out.

Why is supplemental spousal liability insurance getting so much news coverage?

Even though supplemental spousal liability coverage isn’t new, it’s making headlines because of how it works and because of how it’s being offered. Some news outlets have chosen to highlight how, technically, supplemental spousal liability works by enabling an injured spouse to sue their spouse for bodily injury coverage if they’re the at-fault driver. The idea of couples suing each other sounds salacious and probably inspires a few extra clicks. What this really means, however, is that spouses gain the ability to sue their spouse’s insurance company to receive additional coverage – not necessarily the individual driver.

Another reason this coverage is making news is how many drivers are finding out about it. Instead of choosing the coverage themselves or being asked if they want to add it, supplemental spousal liability coverage is added automatically to every new and existing policy in New York State. Even single drivers, who can’t benefit from the coverage, will have it on their policy – which has raised some alarm bells. Luckily, it’s easy to reject this coverage and you don’t need it if you’re a single driver!

Another reason this coverage is making news is how most drivers are finding out about it. Instead of choosing the coverage themselves or being asked if they want to add it, supplemental spousal liability coverage is added automatically to every new and existing policy in New York State. Even single drivers, who can’t benefit from the coverage, will have it on their policy – which has raised some alarm bells. Luckily, it’s easy to reject this coverage and you don’t need it if you’re a single driver!

Should I get supplemental spousal liability coverage?

If you’re insured in New York State, you don’t have to do anything to get supplemental spousal liability. Your insurance policy will automatically update with this coverage, which does mean a slight increase in your premium.

Should I decline supplemental spousal liability coverage?

If you’re unmarried, there is no reason to keep this insurance coverage on your policy. You can decline it by submitting a declination form, which tells the state that you don’t want this policy. If you’re married, but unsure if you want this coverage, it is estimated to add only $20-64 a year to most auto policies. If you and your spouse drive together frequently, this small yearly amount could provide significant additional protection if one of you is injured in a crash and the other is at-fault.

How do I decline this coverage?

Whether you’re buying a new policy or adjusting your old one, you can reach out to your insurance company directly and let them know that you’d like to decline supplemental spousal liability insurance. They will most likely provide you with a written form to submit that shows you’ve willingly rejected the policy. If your insurance company doesn’t have a form available, the New York State Department of Financial Services has provided an official declination form that can be submitted to your insurance company to officially remove this coverage.

How will supplemental spousal liability coverage affect my insurance rates?

If you don’t do anything, supplemental spousal liability coverage will automatically be added to your policy and your rates will go up. Most estimates show that this coverage won’t make a huge impact, only costing approximately $50/year more for drivers. However, car insurance in New York State is already expensive – the National Association of Insurance Commissioners (NAIC) estimates that New York drivers paid 29% more in premiums than drivers nationwide. This change will raise prices, so if you’re looking for better car insurance rates in New York, we recommend our guide to your cheapest car insurance options in the state.

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