Offering of Loss Mitigation Tools and Services and Discounts for the Installation of Loss Mitigation Devices and Systems

How it works

The Department of Financial Services issued this circular letter to property/casualty insurers authorized to write business in New York, the New York Property Insurance Underwriting Association (NYPIUA), and rate service organizations. The goal is to reduce risks and costs and help create a more affordable and resilient insurance market.

Insurers are encouraged to offer loss mitigation tools and services to insureds for free or at a reduced fee in connection with homeowners’ policies. The circular specifically gives examples such as smart water monitor and shutoff devices, and electrical fire sensors and monitors.

The circular also encourages insurers, NYPIUA, and rate service organizations to file actuarially appropriate discounts for the installation of devices or systems that mitigate or prevent losses. Examples named in the letter include smoke alarms, sprinkler systems, fire extinguishers, and deadbolt locks.

What the money covers

The circular discusses two related benefit types:

• free or reduced-fee loss mitigation tools and services;
• insurance rate discounts tied to installation of mitigation devices or systems.

It also reminds insurers and NYPIUA that they must provide an actuarially appropriate reduction in rates for fitting or retrofitting real property with hurricane/storm shutters and hurricane-resistant laminated glass windows or doors.

Amounts and matching

The page does not state a program grant amount or a fixed discount amount. It explains that:

• tools or services with a market value of $25 or less may be offered free or at reduced fee without being specified in the policy;
• if the tool or service exceeds $25 in market value, it must be specified in the insurance policy, have a legitimate nexus to the insurance coverage, and be necessarily or properly incidental to the insurer’s insurance business;
• discounts should be actuarially appropriate.

How to apply

This is not a direct homeowner grant application program. Homeowners should ask their insurer or NYPIUA whether a qualifying tool, service, or discount is available under their policy, and what the policy terms require.

Timing and deadlines

The circular letter is dated 2024-05-23. The page does not state an end date or application deadline.