Governor Kathy Hochul’s high-profile push to lower auto insurance premiums, supported by major tech and insurance industry interests, hinges on claims that widespread insurance fraud is driving New York’s high rates. However, a Streetsblog investigation reveals that prosecutions, arrests, and convictions for such fraud remain strikingly low, raising questions about the administration’s rationale.
Across New York City and surrounding counties, district attorneys have pursued only a handful of drivers for staged crashes, even in areas with the highest insurance costs. Critics say this undermines Hochul’s argument that fraud is a primary driver of premium increases.
The Department of Financial Services reported receiving 43,811 “suspected motor vehicle insurance fraud” cases in 2025. These allegations range from no-fault insurance claims to theft, arson, vandalism, and falsified documents. About 70% of these cases involved no-fault insurance, which the governor’s proposed reforms would not alter.
Of those 43,811 reports, only 243 investigations were opened, resulting in 169 arrests. The state did not disclose the number of convictions, but even if every arrest led to a conviction, the closure rate would be less than 0.4%. Experts suggest insurers often allege fraud to avoid payouts or maintain investment income, known as insurance “float.”
Data from 2024 further illustrates the gap. Out of 52,105 reported insurance and financial fraud cases, the state’s Insurance Frauds Bureau investigated only 316, resulting in 227 arrests and 145 convictions — a 0.27% closure rate.
“Fraud may be a factor, but it’s not the major cost driver they claim,” said State Senator Jamaal Bailey (D-Bronx). “Portions of premiums attributed to fraud should be reconsidered if the evidence doesn’t support these claims.”
Staged Crashes Rare
Governor Hochul has specifically highlighted staged crashes as a contributor to rising rates, citing 1,729 incidents in 2023. Yet, this number represents a fraction of the 381,290 crashes reported that year. Local law enforcement reports confirm that prosecutions are rare.
The NYPD’s Fraudulent Collision Investigation Squad made 23 arrests in 2023 for staged collisions, with fewer convictions. Borough-level data further underscores the rarity of such cases. Brooklyn DA Eric Gonzalez’s office reported no recent arrests, while Manhattan DA Alvin Bragg confirmed zero prosecutions since at least 2018. The Bronx saw only four convictions last year, two of which were guilty pleas for disorderly conduct rather than insurance fraud. Nassau and Suffolk counties reported zero prosecutions.
Some high-profile cases, such as a 2024 Belt Parkway crash in Queens, have received media attention, but overall, staged crashes remain infrequent.
Industry Influence and Reform Criticism
Critics argue that Hochul’s push aligns closely with insurance industry priorities. Opponents, including the New York State Trial Lawyers Association, assert that fraud is being overstated to justify changes that would limit crash victims’ rights to sue for damages.
Hochul’s plan includes narrowing the definition of “serious injury,” which affects eligibility for pain and suffering claims beyond the $50,000 provided under no-fault insurance. Proposed changes would also restrict compensation for those deemed 51% responsible in accidents and for uninsured drivers, even if unintentionally lacking coverage.
Consumer advocates say these tort reforms are unlikely to reduce premiums meaningfully. “It’s a fantasy to think this will bring rates down, particularly in a state with weak insurance regulation,” said Joanne Doroshow, executive director of the Center for Justice and Democracy.
Legislative Response
While the proposal aims to strengthen law enforcement against insurance fraud, the state Senate and Assembly have excluded Hochul’s auto insurance plan from their one-house budget responses, signaling potential legislative resistance or lack of consensus.
Insurance companies maintain that premiums fluctuate based on claims costs, repairs, litigation, and other factors, making guaranteed reductions unlikely. Hochul has suggested examining excess profit regulations to return revenue to policyholders, though critics say this approach is unlikely to produce savings.
As New Yorkers and lawmakers debate the merits of Hochul’s reforms, the disconnect between alleged fraud and documented prosecutions raises critical questions about the foundation of the governor’s auto insurance agenda.
