QBE failed to secure approval in New York for a new vehicle replacement insurance product after a regulatory review that lasted more than a year.
The insurer submitted the product in January 2025 with a requested February 1, 2025 effective date. The New York Department of Financial Services ultimately disapproved the filing on March 18, 2026.
Vehicle Replacement Insurance, or VRI, is designed as supplemental coverage for owners of new vehicles. If a covered vehicle is declared a total loss, QBE would provide a voucher covering the difference between the primary auto insurer’s settlement and the cost of a new replacement vehicle. QBE distinguished the product from GAP insurance, noting that GAP addresses an outstanding loan balance while VRI is intended to put the customer into a new vehicle.
The product was designed for new vehicles with an MSRP of up to $150,000 purchased from participating OEM dealerships. Earlier versions of the filing specifically contemplated Stellantis vehicles, with benefits delivered through a voucher redeemable at a Stellantis dealer rather than cash.
Pricing depended on the length of coverage and the vehicle’s purchase price. QBE proposed charging 1.682% of the purchase price for a 24-month policy, 3.241% for 36 months, 5.743% for 48 months and 8.468% for 60 months. Customers could also purchase benefits reimbursing up to $1,000 of their underlying auto deductible.
For a $50,000 vehicle, the base VRI premium would therefore work out to about $841 for two years, $1,621 for three years, $2,872 for four years and $4,234 for five years, before any additional deductible benefit.
QBE expected the program to generate approximately $1 million in premium during its first year, growing to $1.7 million in year two and $3.1 million in year three. The insurer planned to market the product directly to consumers through mail and email and said the program was ultimately intended for all U.S. states.
The filing drew extensive scrutiny from New York regulators. Among other issues, DFS questioned QBE’s definition of a total loss, deductible reimbursement provisions, exclusions, cancellation language and policy wording. QBE pushed back on some requests, including DFS’s position that its total-loss definition needed to comply with Regulation 64, arguing that the regulation applies to collision and comprehensive coverage rather than its supplemental VRI product.
Regulators also challenged several exclusions. When DFS asked QBE to remove an exclusion for losses tied to environmental events including hail, windstorms, floods, lightning, freezing, earthquakes and snow, QBE said covering those perils would require it to raise prices and make the product less competitive in New York.
The filing was eventually closed as disapproved, leaving QBE without approval to introduce the product in New York.
