New York Governor Kathy Hochul and the Metropolitan Transportation Authority (MTA) announced a new analysis showing that proposed reforms to the state’s auto insurance system could generate about $48 million in recurring annual savings for the transit agency. Officials say the savings would be reinvested directly into improving subway, bus, and commuter rail services across the region.
The proposal aims to address longstanding issues in New York’s liability laws that critics say have forced transit agencies to pay large settlements for accidents in which they were not primarily responsible. According to the governor’s office, these changes would reduce so-called “jackpot payouts” stemming from lawsuits tied to traffic collisions involving MTA buses.
“New York’s broken insurance system is not only affecting drivers but also the millions of residents who rely on public transit every day,” Hochul said in a statement. She argued that transit agencies have often been treated as deep-pocket defendants, compelled to pay substantial settlements even when they were not at fault. Hochul added that the proposed reforms would generate tens of millions of dollars in annual savings that could be reinvested into more reliable and frequent transit service.
MTA leaders confirmed that any funds saved through the reforms would be directed back into transit operations over time. Janno Lieber, chair and CEO of the MTA, said the proposal would significantly reduce the agency’s exposure to costly litigation and large settlement payouts tied to disputed claims.
“Governor Hochul’s common-sense auto insurance reform will substantially reduce the MTA’s exposure to windfall payouts,” Lieber said. “Every dollar saved can be redirected to delivering more reliable and frequent service for New Yorkers.”
The MTA analysis also found the reforms could benefit transit providers outside the New York City region. More than 130 public transit agencies operating elsewhere in the state could collectively save up to $25 million annually, according to the report. These agencies operate a combined fleet of more than 3,000 buses and serve hundreds of thousands of riders daily in urban, suburban, and rural communities.
State transportation officials say the reform package would modernize New York’s auto liability framework by limiting situations in which parties with minimal responsibility for an accident must shoulder disproportionate financial damages. The changes are designed to ensure that liability more closely reflects actual fault in a crash.
New York State Department of Transportation Commissioner Marie Therese Dominguez said the governor’s proposal addresses the broader consequences of outdated liability laws, which she said contribute to rising insurance costs and unnecessary lawsuits against transit providers.
“The reforms would allow transit agencies to focus more resources on serving riders rather than defending against costly legal claims,” Dominguez said.
The proposal also includes several additional measures aimed at lowering insurance costs and preventing fraud. These include creating new legal liability for criminals who stage accidents, limiting large payouts for individuals driving uninsured or committing crimes, and clarifying the legal definition of a “serious injury” for damages related to pain and suffering.
Other provisions would prevent drivers found at fault in an accident from suing their victims for compensation and ensure that insurance companies pass reform-related savings back to policyholders. Insurers would also be required to justify rate increases and offer technology-based discounts that encourage safer driving.
Hochul’s insurance reform initiative is part of a broader strategy to support public transportation through the FY 2027 Executive Budget. The proposal includes continued investment in the MTA’s capital program to modernize signals, upgrade aging infrastructure, and improve station accessibility.
The budget also maintains funding to support reliable subway, bus, and commuter rail service throughout New York City and surrounding counties, while increasing financial support for transit agencies outside the MTA region. Under the plan, non-MTA systems would see annual funding increases of 5.75 percent in upstate regions and 7.45 percent in downstate areas.
Major transit projects are also included in the proposal, such as plans to redevelop Jamaica Station and extend the Second Avenue Subway westward along 125th Street.
The insurance reform measures are currently included in the governor’s FY 2027 Executive Budget proposal and will be reviewed by the New York State Legislature as part of the budget negotiations ahead of the April 1 deadline.
