NY S00502

Allows insurers to rescind or retroactively cancel newly issued auto insurance policies within 60 days if the initial premium payment is not honored due to nonexistent or unauthorized bank account use, or denied by credit card company due to unauthorized use.

Injured persons whose policies were canceled under this provision may recover under their own insurance policy or, if uninsured, through the Motor Vehicle Accident Indemnification Corporation, provided they did not participate in fraudulent activity.

Expands coverage under uninsured motorist provisions to include vehicles with rescinded or canceled policies and vehicles involved in staged accidents, except those owned by the perpetrators of the staged accident.

Clarifies that insurers cannot subrogate claims against rescinding or canceling insurers, and exempts innocent occupants of vehicles involved in staged accidents from being denied coverage.

Takes effect 270 days after becoming law.