2012 New York Consolidated Laws
PEP - Personal Property
Article 10 - (401 - 422) RETAIL INSTALMENT SALES ACT
402B - Total loss notice and waiver of the gap amount.

 
    §  402B.  Total  loss  notice  and waiver of the gap amount. 1. If the
  retail instalment contract provides that the buyer shall be  responsible
  upon  a  total  loss  of  the goods occasioned by theft, confiscation or
  physical damage for the gap amount as defined in paragraph fifty-two  of
  subsection  (a)  of  section one hundred seven of the insurance law, the
  holder, prior to the execution of the contract, shall by a notice  on  a
  separate  document  conspicuously disclose that fact and the obligations
  for which the buyer would  remain  liable  in  the  event  of  a  theft,
  confiscation or total loss of the goods. If the holder is required under
  subdivision  two of this section to offer to waive its contractual right
  to hold the buyer liable for the gap amount in the event of a total loss
  of the goods occasioned by theft or physical damage,  the  notice  shall
  also:  (a)  state that for a separate charge disclosed in the notice the
  holder will waive its contractual right to hold the buyer liable for the
  gap amount in the event of a total loss of the goods occasioned by theft
  or physical damage; (b) contain a provision informing the buyer that  he
  or  she  may,  as  an  alternative  to  purchasing  a waiver, be able to
  purchase insurance covering the gap amount  from  an  insurance  company
  which  has  been licensed by the superintendent of financial services to
  write non-motor vehicle debtor gap insurance  in  this  state;  and  (c)
  contain  a  provision permitting the buyer to indicate whether he or she
  wants the holder to waive its contractual right to hold the buyer liable
  for the gap amount in the event of a total loss of the goods  occasioned
  by  theft  or  physical damage. The notice shall be signed by the buyer.
  The holder shall provide a copy of the signed notice to  the  buyer  and
  shall maintain a copy in the holder's files for at least the term of the
  contract.  Failure  to  provide  the  notice  and  to obtain the buyer's
  signature as required by this subdivision shall invalidate any provision
  of the agreement which otherwise would obligate a buyer to  pay  to  the
  holder,   after   a  total  loss  of  the  goods  occasioned  by  theft,
  confiscation or physical damage, the gap amount.  No  retail  instalment
  contract  shall  be  conditioned upon the buyer's obtaining of non-motor
  vehicle debtor gap  insurance  as  set  forth  in  subparagraph  (D)  of
  paragraph  twenty-six  of  subsection  (a)  of  section one thousand one
  hundred thirteen of the insurance law.
    2. If the retail instalment contract provides that the buyer shall  be
  responsible  upon  a  total  loss  of  the  goods occasioned by theft or
  physical damage for the gap amount, the holder, prior to  the  execution
  of  the contract, shall offer to waive its contractual right to hold the
  buyer liable for the gap amount in the event of  a  total  loss  of  the
  goods  occasioned by theft or physical damage, only if non-motor vehicle
  creditor gap insurance coverage is available  to  the  holder  and  such
  coverage  is  obtained from a property/casualty insurance company, which
  has been licensed by the superintendent of financial  services  of  this
  state  to  write non-motor vehicle creditor gap insurance in this state.
  This offer may be made contingent upon the payment by  the  buyer  of  a
  separate  charge  that  shall  not  exceed the cost of non-motor vehicle
  creditor gap insurance covering the retail instalment contract.  Nothing
  contained  in  this section shall be construed to authorize a waiver, in
  connection with a transaction with respect to  which  non-motor  vehicle
  creditor  gap insurance has not been obtained, of a contractual right to
  hold the buyer liable for the gap amount in the event of a total loss of
  the goods occasioned by theft or physical damage.
    3. A holder shall not be  obligated  under  subdivision  two  of  this
  section to offer to waive its contractual right to hold the buyer liable
  for  the  gap  amount if, during the current calendar year or during the
  odd-numbered calendar year immediately preceding the  calendar  year  in
  which  the  agreement is entered into, the holder has received non-motor

  vehicle creditor gap insurance declination notices or other evidence  of
  unavailability  from  every  insurance company whose name appears on the
  department of financial  services  compilation  of  insurance  companies
  which  during  that  calendar  year  were  authorized to write non-motor
  vehicle  creditor  gap  insurance  in  this  state.  Evidence  of  these
  declinations  shall  be  retained  by  such a holder for a period of six
  years after the expiration of the  calendar  year  in  which  they  were
  issued.
    4.  In order to enable holders to comply with the requirements imposed
  by subdivision two of this  section,  the  superintendent  of  financial
  services shall compile and make available a periodically updated list of
  those  insurance  companies  which  are  authorized  to  write non-motor
  vehicle creditor gap insurance coverage in this state.
    5. Nothing in this section shall be construed to apply to  the  holder
  under  a  retail instalment contract under which the buyer is not liable
  upon a total loss of the goods  occasioned  by  theft,  confiscation  or
  physical damage for the gap amount.