The New York State Insurance Department has issued a legal opinion in response to an anonymous inquiry regarding whether automobile collision repair facilities are permitted to pay part or all of an insured’s deductible.  The opinion states that such a payment does not constitute a rebate, which the N.Y. Ins. Law § 2324 prohibits, and therefore is permissible.  The reasoning behind this decision is that automobile repair shops have no relationships with insurance carriers and are not licensees under New York insurance laws, nor are the repair shops acting on behalf of a licensee, and so permitting repair shops to pay insureds’ deductibles does not meet the definition of an illegal rebate because a “relationship between the automobile collision repair facility and any particular insurer [is] an essential element of Section 2324.”

To view the full opinion click here.