Until Death, or a New Policy, Do You Part

It’s a law affecting millions of New Yorkers and few know much about it. The supplemental spousal liability measure passed on Jan. 1, 2023, and took effect on Aug. 1. The law requires all New York car insurance policies to now include supplemental spousal liability coverage.

Spousal liability coverage explained

Spousal liability insurance provides bodily injury liability coverage for the insured if their spouse causes an accident that injures them, as a passenger. This means if a person is injured in a crash when their spouse is driving, they may be able to collect compensation from the insurance company to cover medical expenses.

“We have not heard of instances where one spouse sued another, but the coverage could become important when an insurer for another driver pays for damages and subrogates against the insured driver,” the New York chapter of the Independent Insurance Agents & Brokers of America said in a March blog post. “It might also become important in relation to a supplementary uninsured/underinsured motorist claim.”

This change in policy only applies to primary auto liability coverage and not umbrella liability coverage.

From opt in to opt out

The supplemental spousal liability law isn’t a completely new concept for New York drivers. In fact, supplemental spousal liability protections have existed before. However, previous versions of this coverage were only available through written request.

The new law changes that by making supplemental spousal liability automatically included in every New York policy. Instead of sending a written notification to opt in, drivers must now opt out of coverage, in writing, if they don’t want it.

The supplemental spousal liability clause will probably add an additional $20–$84 to annual insurance premiums, Paul Dreher, director of personal insurance for Lawley Insurance, wrote on the company’s website.

The clause will also be added to every insured driver’s coverage, even if the driver isn’t married.

To opt out of supplemental spousal liability coverage, people must fill out a declination letter to send in. Policyholders can get this letter from their insurer.

Why change the law?

Because the previous iteration required policyholders to request supplemental spousal liability coverage in writing, many unknowingly waived this coverage, according to the United Public Service Employees Union. The new law seeks to prevent this by putting the onus on those seeking to waive coverage instead of those seeking to gain coverage.

Former Assembly Insurance Committee Chair Kevin Cahill (D - Kingston) originally sponsored the measure. It passed the State Assembly 110-39, on May 31, 2022. The State Senate approved it a day later by a vote of 60-3.

New York Gov. Kathy Hocul signed it into law Dec. 23, 2022, requiring the effective day to be pushed back  to give the state’s financial services department the opportunity to update its forms and regulations.

What's next?

Policyholders interested in maintaining their supplemental spousal liability coverage don’t need to do anything. The coverage is already part of standard insurance packages.

However, those looking to waive this coverage and save money at the same time must contact their insurer to obtain a declination letter and waive the coverage in writing.