Section 302A. 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 vehicle occasioned by its 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 vehicle. 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 vehicle occasioned by its 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  vehicle
  occasioned  by  its  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
  insurance to write 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 vehicle
  occasioned by its 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 motor vehicle occasioned by
  its  theft,  confiscation  or physical damage, the gap amount. No retail
  installment contract shall be conditioned upon the buyer's obtaining  of
  motor  vehicle  debtor 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 instalment contract provides that the buyer shall be
  responsible upon a total loss of the vehicle occasioned by its theft  or
  physical  damage  for the gap amount, the holder, prior to the execution
  of the agreement, 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
  vehicle  occasioned  by  its  theft  or  physical  damage, only if 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 insurance of this state
  to write 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  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 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
  vehicle occasioned by its 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 motor

  vehicle creditor gap insurance declination notices or other evidence  of
  unavailability  from  every  insurance company whose name appears on the
  insurance department compilation of  insurance  companies  which  during
  that  calendar  year were authorized to write motor vehicle creditor gap
  insurance in  this  state.  Evidence  of  these  declinations  shall  be
  retained  by  such  a  holder of 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 or their anticipated assignees to comply
  with the requirements imposed by subdivision two of  this  section,  the
  superintendent   of   insurance  shall  compile  and  make  available  a
  periodically  updated  list  of  those  insurance  companies  which  are
  authorized  to  write  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 vehicle occasioned by its  theft,  confiscation
  or physical damage for the gap amount.