2012 New York Consolidated Laws
PEP - Personal Property
Article 9-A - (330 - 353) MOTOR VEHICLE RETAIL LEASING ACT
335 - Total loss notice and waiver of the gap amount.

 
    §  335.  Total  loss  notice  and  waiver of the gap amount. 1. If the
  retail lease agreement provides that the  lessee  shall  be  responsible
  upon  a  total loss of the vehicle occasioned by its theft, confiscation
  or physical damage  for  the  gap  amount,  the  lessor,  prior  to  the
  execution  of  the  agreement,  shall by a notice on a separate document
  conspicuously disclose that fact  and  the  obligations  for  which  the
  lessee  would  remain  liable  in  the event of a theft, confiscation or
  total loss of the vehicle. If the lessor is required  under  subdivision
  two  of this section to offer to waive its contractual right to hold the
  lessee liable for the gap amount in the event of a  total  loss  of  the
  vehicle  occasioned  by  its  theft or physical damage, the notice shall
  also: (a) state that for a separate charge disclosed in the  notice  the
  lessor  will  waive  its contractual right to hold the lessee liable for
  the gap amount in the event of a total loss of the vehicle occasioned by
  its theft or physical damage; (b)  contain  a  provision  informing  the
  lessee  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 motor vehicle lessee gap insurance in this state;  and
  (c)  contain a provision permitting the lessee to indicate whether he or
  she wants the lessor to waive its contractual right to hold  the  lessee
  liable  for  the  gap amount in the event of a total loss of the vehicle
  occasioned by its theft or physical damage. The notice shall  be  signed
  by the lessee. The lessor or assignee shall provide a copy of the signed
  notice  to  the  lessee,  and  shall  maintain a copy in the lessor's or
  assignee's files for at least the term of the lease. Failure to  provide
  the  notice  and  to  obtain  the lessee's signature as required by this
  subdivision shall  invalidate  any  provision  of  the  agreement  which
  otherwise  would  obligate  a lessee to pay to the holder, after a total
  loss of the motor vehicle  occasioned  by  its  theft,  confiscation  or
  physical  damage  the  gap  amount.  No  retail lease agreement shall be
  conditioned upon the lessee's obtaining  of  motor  vehicle  lessee  gap
  insurance  as  set  forth in subparagraph (B) of paragraph twenty-six of
  subsection (a) of section one  thousand  one  hundred  thirteen  of  the
  insurance law.
    2.  If  the  retail  lease agreement provides that the lessee shall be
  responsible upon a total loss of the vehicle occasioned by its theft  or
  physical  damage  for the gap amount, the lessor, prior to the execution
  of the agreement, shall offer to waive its contractual right to hold the
  lessee liable for the gap amount in the event of a  total  loss  of  the
  vehicle  occasioned  by  its  theft  or  physical  damage, only if motor
  vehicle lessor gap insurance coverage is available to the lessor or  the
  anticipated   assignee   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 motor
  vehicle lessor gap insurance in this  state.  This  offer  may  be  made
  contingent  upon  the  payment  by  the lessee of a separate charge that
  shall not exceed the cost of lessor gap insurance  covering  the  retail
  lease  transaction plus an administrative fee not to exceed ten dollars.
  Nothing contained in this section shall  be  construed  to  authorize  a
  waiver,  in  connection  with a transaction with respect to which lessor
  gap insurance has not been obtained, of a contractual right to hold  the
  lessee  liable  for  the  gap amount in the event of a total loss of the
  vehicle occasioned by its theft or physical damage.
    3. A lessor shall not be  obligated  under  subdivision  two  of  this
  section  to  offer  to  waive  its  contractual right to hold the lessee
  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 lessor or the anticipated
  assignee of the lessor has received motor vehicle lessor  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 motor vehicle lessor gap insurance in this
  state. Evidence of these declinations shall be retained by such a lessor
  or  the  anticipated assignee of such a lessor for a period of six years
  after the expiration of the calendar year in which they were issued.
    4. In order to enable lessors or their anticipated assignees 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 motor vehicle lessor gap insurance coverage in this
  state.
    5. Nothing in this section shall be construed to apply to the  lessor,
  or  any anticipated assignee of a lessor, under a retail lease agreement
  under which the lessee is not liable upon a total loss  of  the  vehicle
  occasioned  by  its  theft,  confiscation or physical damage for the gap
  amount.