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Governor Kathy Hochul has unveiled a comprehensive plan to tackle New York's sky-high car insurance rates, which currently cost drivers an average of over $4,000 annually—nearly $1,500 above the national average.
"Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living," Governor Hochul said in her recent State of the State address. "These reforms will crack down on fraud, help drive costs down, and put money back in the pockets of hardworking New Yorkers."
The governor's plan focuses heavily on combating insurance fraud, which has increased by 58 percent over the past three years. In 2023 alone, New York saw 1,729 staged crashes, making it the state with the second-highest incidence of staged fraud nationwide. Insurance carriers reported a record 38,270 incidents of suspected motor vehicle insurance fraud that same year.
To address these issues, Hochul plans to revitalize the state's Motor Vehicle Theft and Insurance Fraud Prevention Board, empowering it to investigate and prosecute insurance fraud more aggressively. She also intends to work with district attorneys to build stronger cases against organized fraud rings.
The governor's proposals include:
• Extending the timeframe insurers have to investigate potentially fraudulent claims beyond the current 30-day limit
• Seeking criminal penalties against anyone organizing staged accidents, not just drivers
• Targeting healthcare providers who provide fraudulent diagnoses
• Limiting payouts for non-economic damages like pain and suffering for drivers engaged in criminal behavior
• Taking action against New York drivers who illegally register vehicles in other states
"High car insurance rates don't just impact drivers; they impact all New Yorkers when businesses pass on increased costs to customers," Hochul explained during a Thursday press conference on Wards Island.
The governor also plans to reform the state's "serious injury" threshold with clearer criteria based on objective medical standards, and limit non-economic damages for drivers deemed mostly at fault in accidents.
While the proposals have received praise from reform advocates, they're already facing pushback from trial lawyers who have criticized the plan as a "victim tax" that would benefit insurance companies at taxpayers' expense.
Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, praised Hochul's initiative, saying her proposals "will help make insurance more affordable and our roads safer."
The Department of Financial Services will also examine the Excess Profit Law applying to auto insurers to ensure consumers, not just insurance companies, benefit from these changes.
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