American Transit Ins. Co. v. Abdelghany, 80 N.Y.2d 162 (1992)

New York law mandates that automobile insurance policies provide at least the minimum amount and kind of uninsured motorist coverage required by the state in which the insured vehicle is being used or operated.

Summary

These cases address whether New York insurance law requires every New York automobile insurance policy to provide the minimum uninsured motorist coverage mandated by another state when the insured vehicle is involved in an accident in that state. The New York Court of Appeals held that it does, based on Insurance Law § 5103(e) and related regulations. This means New York insureds receive the benefit of the other state’s minimum coverage requirements, even if those requirements exceed what New York law typically mandates. This decision ensures protection for New York drivers venturing into other states with different insurance laws.

Facts

In Abdelghany, a New York resident was involved in an accident with an uninsured vehicle in New Jersey. His New York policy limited uninsured motorist coverage to accidents within New York. In Finker, a New York resident driving in New Jersey was forced off the road by an unidentified vehicle, but there was no physical contact. New Jersey law, unlike New York law, allows uninsured motorist coverage without physical contact in hit-and-run scenarios.

Procedural History

In Abdelghany, the Supreme Court initially granted a stay of arbitration, then reversed and denied the stay. The Appellate Division affirmed, holding that New Jersey’s minimum coverage must be read into the New York policy. The Court of Appeals granted leave to appeal.
In Finker, the Supreme Court granted a stay of arbitration based on First Department precedent. The Appellate Division affirmed. The Court of Appeals granted leave to appeal.

Issue(s)

Whether Insurance Law § 5103(e) and the implementing regulation (11 NYCRR 60-1.1(e)) require that every New York automobile insurance policy must provide the minimum uninsured motorist coverage mandated by the law of another State when the insured automobile is involved in an accident in that State.

Holding

Yes, because Insurance Law § 5103(e) mandates that New York insurance policies provide at least the minimum amount and kind of coverage required by the state where the accident occurs.

Court’s Reasoning

The Court relied on the plain language of Insurance Law § 5103(e), which states that policies must provide “insurance coverage for such motor vehicle at least in the minimum, amount required by the laws of that state.” The court also cited the implementing regulation (11 NYCRR 60-1.1[e]), specifying policies must “provide at least the minimum amount and kind of coverage which is required in such cases under the laws of such other jurisdiction.” The legislative history of section 5103 demonstrates the purpose was to assure that the carriers provide not only the amount of coverage but “that type of coverage minimally required by the state in which [the insured] is visiting”.

The court distinguished Matter of Sentry Ins. Co. (Amsel), noting that it concerned a different section of the Insurance Law (former § 167 [2-a], recodified as § 3420 [f] [2]) which required uninsured motorist coverage for accidents “occurring in this state.” Unlike § 5103(e), the former section did not have a provision requiring coverage equivalent to that mandated by the foreign state where the accident occurs.

The court also rejected the argument that § 3420(f)(2), which permits optional uninsured motorist coverage for out-of-state accidents, is inconsistent with the mandate of § 5103(e). “Permitting optional uninsured motorist coverage for accidents in all foreign States, including those which do not require such coverage, is in no way inconsistent with a provision mandating uninsured motorist coverage only in those States which do require it.”

The Court emphasized that the purpose of Insurance Law § 5103(e) is to protect New York insureds by ensuring that the minimum insurance coverage required under the laws of the accident’s location will apply, even if it differs from New York law. The court noted that to accept the insurer’s argument would defeat the salutary concept of section 5103(e), i.e., looking to the laws of other jurisdictions if those jurisdictions require “different, and perhaps higher, minimum liability levels”.