New York Governor Kathy Hochul unveiled a package of proposals Jan. 22 aimed at reducing auto insurance costs by targeting fraud and revising liability and damages rules.
New York drivers pay an average of just over $4,000 annually for car insurance, about $1,500 more than the national average, according to state data. Insurance carriers reported 38,270 suspected motor vehicle insurance fraud incidents to the New York State Department of Financial Services in 2023, up 58% from 24,238 cases in 2020. The state recorded 1,729 staged crashes last year, the second-highest total in the U.S.
Hochul’s proposals focus on fraud enforcement, insurer reporting requirements and changes to how damages are awarded following vehicle collisions. Measures include reinvigorating the state’s Motor Vehicle Theft and Insurance Fraud Prevention Board, expanding prosecutors’ authority to pursue individuals who organize staged crashes and strengthening oversight of medical providers involved in fraudulent claims.
The plan also proposes extending the time insurers have to investigate and report suspected fraud and reducing barriers to alleging fraud in court.
Several proposals would limit non-economic damages in specific circumstances. These include capping pain and suffering awards for drivers engaged in unlawful activity at the time of a collision and restricting recovery of non-economic damages for drivers deemed mostly at fault. Hochul is also seeking to tighten New York’s serious injury threshold by introducing more objective medical standards.
Additional measures include reforming joint and several liability rules, increasing transparency around premium changes and requiring insurers to offer discounts to drivers who voluntarily participate in safe-driving programs.
Hochul said the proposals are intended to address fraud and litigation costs that contribute to higher premiums. The reforms would require legislative approval as part of the state budget process.
