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In New York an Insurer May Not Even Suggest a Shop: The Rule, the Case That Narrowed It, and the Door the Regulation Leaves Open

Short answer: New York bars your insurer from recommending a body shop at all, not just from requiring one, unless you expressly ask. Section 2610(b) of the Insurance Law reaches recommending or suggesting one, not merely requiring it. Insurers sued over that on free-speech grounds and partly won: the Court of Appeals held the statute reaches only recommendations about particular shops, not the insurer's advertising for its own repair program. A regulation then opens a door the statute does not. Once negotiations fail to reach an agreed price and the insurer sends you a prescribed notice of rights, it may name a shop, and if you ask it must name one that will actually do the job for the insurer's number. Claims solely involving window glass are carved out entirely.

By Anthony Braswell for Quorum Industries LLC, The Autobody Directory · Updated 2026-08-16 · How this was written, and what the machine may not do

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The rule is two sentences

The Department of Financial Services quotes the section in full in its 2007 opinion on direct repair programs:

Collision or comprehensive coverage on motor vehicles; claims; repairs. (a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefor shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern. (b) In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern.

Two separate prohibitions, and they are not the same prohibition twice. Subsection (a) is the one every state has some version of: no requiring. Subsection (b) is the one that surprises people, including people who work claims for a living. The trigger is not coercion. The trigger is the suggestion itself.

The Department states the purpose in one line: it is "to prevent the steering of insureds to facilities favored by the insurer."

The window glass carve-out is inside the parenthetical

Read the parenthetical in (b) again: other than a claim solely involving window glass. Glass-only claims sit outside the recommendation bar entirely, which is why the glass side of this industry behaves so differently from the collision side in the same state. That pattern repeats: New York is not the only place where glass got written its own rules, and usually looser ones. See aftermarket parts rules exclude auto glass and auto glass disclosure laws by state.

"Unless expressly requested" is stricter than it sounds

In June 2004 the Department was asked a question with a sympathetic fact pattern. A vehicle manufacturer required repairs on its cars to be done at shops it had certified. The owner's chosen shop was not certified, and the manufacturer refused to sell it the parts. The manufacturer argued the insurer should have warned the owner.

The Department said no:

Such advice given by an insurer without a recommendation request from the insured owner is prohibited under Section 2610(b) of the Insurance Law. However, the insurer may voluntarily advise the owner that the automobile manufacturer does have a certified repair shop requirement and suggest that the owner may wish to contact the manufacturer for further information.

Read the line the Department drew. The insurer may tell you that a certification requirement exists and point you at the manufacturer. It may not tell you which shops satisfy it. The Department added that the duty to inform owners about certified shops belongs to the manufacturer, "not the owner's insurer."

The referral-payment statute almost nobody quotes

Section 2610 is the famous one. Section 322 sits next to it and does different work:

No licensed insurance agent, licensed insurance broker, licensed adjuster, authorized insurer or representative of such insurer shall directly or indirectly request, procure or accept any payment from a motor vehicle repairer for referring any motor vehicle repair business to such repairer.

In 2007 an insurer asked whether it could hand a $20 gasoline gift card to an agent or customer service representative who reminded an insured that the insurer's direct repair program existed. The Department said section 322 did not prohibit it, for a precise reason: the money moves from the insurer to its own agent, not from a repairer to the insurer. Section 322 catches payments from the shop.

Then it added the warning that matters more than the answer:

Although the Promotion Program does not in and of itself constitute a per se violation of SS 2610(b), it is nevertheless foreseeable that incentivizing the Company's agents or CSRs to "remind" insureds of the existence of the insurer's DRP may well lead to violations of the statute.

The Department told the company to write detailed guidelines and telephone scripts before launching. That is a regulator saying, in advance, that it expects the incentive to produce the violation.

What the courts took out of the rule

Do not overclaim this statute. Its scope was litigated for six years and it came out narrower than the Department originally read it.

In 2000 the Southern District of New York held that 2610(b), as applied to two insurers, violated the First Amendment as a restriction on commercial speech. The Department responded with Circular Letter No. 16 (2000), announcing that it would not enforce the section. On appeal the Second Circuit declined to decide the constitutional question and certified questions of state law to the New York Court of Appeals instead.

That court upheld the restriction on shop recommendations, and in the same breath cut it down to size:

The literal language of section 2610(b) restricts when an insurance company can make recommendations or suggestions that repairs be performed at a particular shop. The statute does not regulate speech on subjects other than recommendations or suggestions about particular shops, nor does the statute regulate the content or placement of material promoting an insurance company's repair program, nor does the statute regulate discussion or distribution of its text.

So: the insurer's direct repair program may be advertised. Brochures, websites, mailers, the program's existence, all of it is outside the statute. What is inside the statute is naming a shop on your claim when you did not ask.

The paperwork trail is worth knowing, because outdated versions of it still circulate. Circular Letter No. 4 (1994) contained the Department's original interpretation; the Court of Appeals invalidated it and it remains withdrawn. Circular Letter No. 16 (2000), the non-enforcement notice, was itself withdrawn in December 2003. What governs now is Circular Letter No. 14 (2003), which states that section 2610(b) "remains in effect, and will be enforced by the Insurance Department consistent with the interpretation of the statute by the New York Court of Appeals."

There is one more retraction, and it is unusually blunt. In July 2008 the Department was told that insurers were citing an April 2002 opinion of its own Office of General Counsel in court, for the proposition that an insurer may recommend a shop unasked. The Department answered the question "No", and then wrote that any of its opinion letters to the contrary, "including the April 16, 2002 opinion described in the fact pattern, do not represent the Department's position, and should no longer be followed."

The door the regulation leaves open

Here is the part that gets left out of the shop-floor version of this rule. Regulation 64 lets the insurer name a shop, at a defined point in the claim.

Under 11 NYCRR 216.7(b)(14)(i), if negotiations do not produce an agreed price, the insurer must send the insured a prescribed notice of rights letter, the NYS APD 1. After that letter goes out, the insurer may make the recommendation the statute otherwise forbids. And under 216.7(b)(14)(ii), on the express request of the insured or the designated representative, the insurer must furnish

the name and address of a New York State registered motor vehicle repairer, properly equipped to complete the repairs on the damaged motor vehicle (back-up shop), at a location reasonably convenient to the insured, who will repair the damaged motor vehicle at the insurer's estimated cost of repair.

Read the final clause twice if you write estimates for a living. The number the insurer settles on is not free-floating. On request, it has to be a number at which a real, registered, properly equipped, reasonably convenient New York shop will actually do the work. The back-up shop is the regulation's reality test on the estimate, and it is the closest thing in New York law to an answer for "nobody around here will do it for that".

Labor rates: what good faith does and does not require

Two Department opinions from 2008, five months apart, are usually quoted against each other. They do not actually conflict, and the pair is the honest answer.

In July 2008 the Department was asked whether an insurer must negotiate labor rates as part of a good faith negotiation. Answer: "Yes. A good faith negotiation, like a good faith settlement offer, should be inclusive of all elements of the cost of the repair, including labor rates."

In December 2008 it was asked whether an insurer that refuses to move off its posted rate is negotiating in good faith. Answer: an insurer "is not required to alter its initial negotiating position on labor rates, or any other negotiable issue, provided that its position is taken in good faith." The Department reached that by observing that neither the Insurance Law nor Regulation 64 defines good faith negotiation, and then reading the ordinary meaning of "negotiation."

Put together: the labor rate is a required subject of the negotiation, and being a required subject is not the same as being required to move. What constrains the number is not an obligation to meet your rate. It is the back-up shop condition above, plus the regulation's own words in 216.7(b)(1) requiring "a good faith offer of settlement, sufficient to repair the vehicle to its condition immediately prior to the loss."

The Department also drew the payment line, with a caveat it did not have to include. If the insurer makes a good faith offer, sends the APD 1, and identifies a facility that will do the repair at its estimate, it is not obliged to pay above that. But, it wrote, "at least one court has held that an insured may be awarded the balance of the repair costs if the insured establishes that the excess cost was necessary to restore the vehicle." Necessity, proved, is the lever. Preference is not.

If you run a shop

The statute's subject matter is narrow and specific, which makes it easy to document. The moment an adjuster names a facility on a New York collision claim where the insured did not ask, that is the conduct the section addresses. What is not the conduct: the direct repair program existing, being advertised, appearing on the insurer's site, or being described in a brochure. The Court of Appeals put all of that outside the statute, and an argument that ignores it will lose.

Three practical consequences. Record who asked whom, and when, because "expressly requested by the insured" is the whole hinge. Know that the APD 1 changes what the insurer may say, so a recommendation late in a stalled claim may be entirely lawful. And if you are being told the insurer's number is take-it-or-leave-it, the request to make is not for a higher rate, it is for the back-up shop: the registered, properly equipped, reasonably convenient shop that will do this repair for that money.

Complaints go to the Department of Financial Services, which is the same body that wrote every document quoted on this page.

What we have not read

Related

Sources

All read first-party on 2026-08-16, all published by the New York State Department of Financial Services.

Opinions of the Office of General Counsel state the Department's position. They are not statutes, regulations, or court decisions, and the Department has withdrawn its own interpretations before. Nothing here is legal advice about your claim.

General consumer information: not legal, insurance, or financial advice. Requirements, coverage, and practices vary by state, policy, and manufacturer.

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