Gov. Kathy Hochul unveiled a broad package of proposals aimed at lowering auto insurance premiums across New York by cracking down on fraud, limiting costly payouts, and increasing transparency for consumers.
Hochul said New Yorkers pay some of the highest car insurance rates in the nation, averaging just over $4,000 a year — nearly $1,500 above the national average. State officials attribute much of that cost to insurance fraud, litigation, and legal loopholes that drive up premiums for law-abiding drivers.
The proposal focuses heavily on combating staged accidents and organized fraud rings. State data shows 1,729 staged crashes were reported in New York in 2023, the second-highest total in the country. That same year, insurers reported more than 38,000 suspected cases of motor vehicle insurance fraud, a 58 percent increase since 2020.
To address the issue, Hochul is proposing to reinvigorate the state’s Motor Vehicle Theft and Insurance Fraud Prevention Board, expand prosecutors’ ability to charge individuals who organize staged crashes, and strengthen enforcement against medical providers who participate in fraudulent claims. The plan also targets drivers who illegally register vehicles out of state to avoid proper insurance coverage.
The governor is also seeking changes to liability laws that would limit non-economic damages, such as pain and suffering, for drivers who were engaged in unlawful behavior at the time of an accident, including impaired or uninsured drivers. Another proposal would restrict payouts for drivers found to be mostly at fault for a crash.
Hochul’s plan would also tighten New York’s definition of a “serious injury” under the state’s no-fault insurance system. Officials say the current standard is vague and inconsistently applied, leading to excessive litigation and inflated payouts for minor injuries. The proposed reforms would establish clearer medical criteria.
Additional changes would reform joint and several liability rules so defendants who are less than 50 percent at fault are responsible only for the damages they caused. State officials say this could allow insurers to lower premiums by reducing exposure to excessive claims.
The proposal includes measures to ensure savings are passed on to consumers, including a review of the state’s Excess Profit Law, which requires insurers to return excess profits to policyholders. Insurers would also be required to provide clearer explanations when rates increase.
Hochul said the reforms are part of her broader affordability agenda and will be considered as part of negotiations on the 2026 state budget.
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