Car insurance bills could soon drop for New Yorkers under a new push from Gov. Kathy Hochul to crack down on fraud and change how damages get paid.
Hochul outlined a package of proposals Tuesday aimed at lowering vehicle insurance rates, limiting fraudulent claims, and putting money back into drivers’ pockets. The plans build on her broader effort to make New York more affordable.
“New Yorkers know all too well that the cost of car insurance is just way too high, and for most, having a car is a daily necessity whether you’re required to travel for work or to run errands,” Hochul said.
New Yorkers pay some of the highest auto insurance rates in the country. The average cost tops $4,000 a year, nearly $1,500 above the national average. State officials say a mix of fraud, litigation, legal loopholes, and enforcement gaps continue to push rates higher.
In 2023, New York recorded 1,729 staged crashes, ranking second in the nation. Insurers reported 43,811 suspected motor vehicle insurance fraud cases in 2025, an 80 percent increase from 2020.
To combat that rise, Hochul is proposing a statewide crackdown on organized auto insurance fraud. Her plan would reinvigorate the Motor Vehicle Theft and Insurance Fraud Prevention Board and allow prosecutors to pursue criminal penalties against those who organize staged crashes, not just the driver involved.
The proposals also call for closer partnerships with district attorneys, stronger enforcement against medical providers who participate in fraudulent claims, and action against drivers who illegally register vehicles out of state.
Hochul is also seeking to change how insurers investigate fraud. Current law limits insurers to 30 days to identify and report suspected fraud. The governor wants to extend that timeframe and reduce barriers to alleging fraud in court, while maintaining consumer protections.
Other proposals would limit non-economic damages, such as pain and suffering, for drivers engaged in criminal behavior at the time of a crash. That includes impaired drivers, uninsured motorists, and individuals committing or fleeing a felony.
The governor is also pushing to limit damages for drivers who are mostly at fault in an accident. New York currently allows those drivers to collect significant payouts, a policy Hochul says increases costs for law-abiding drivers.
Additional reforms would tighten the definition of a serious injury under the state’s no-fault law by creating clearer medical standards. The administration says the change would reduce unnecessary litigation and curb inflated claims.
Hochul is also seeking to reform joint and several liability rules so defendants who are less than 50 percent at fault are only responsible for the damages they caused.
If the proposals lead to lower insurance costs, Hochul said the state would re-examine the Excess Profit Law to ensure savings are returned to policyholders. She also wants insurers to better explain rate increases and offer discounts to drivers who opt into programs shown to reduce unsafe driving and fraud.
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