Governor Kathy Hochul on Thursday stepped up efforts to curb rising auto insurance costs in New York, unveiling a series of proposals aimed at tackling fraud, limiting excessive payouts and ensuring consumers — rather than insurers — benefit from reforms.
Speaking alongside lawmakers and advocacy groups, Hochul said the measures are designed to address systemic abuses that have driven premiums higher across the state. The initiative forms part of her broader agenda to improve affordability and return savings to residents.
“Hardworking New Yorkers should not have to face skyrocketing auto insurance costs because of bad actors,” Hochul said, adding that fraudulent claims and outsized legal settlements are draining resources and inflating premiums for drivers, transit systems and emergency services alike.
New York drivers currently face some of the highest insurance costs in the United States, paying just over $4,000 annually on average — roughly $1,500 above the national average. Officials attribute the elevated costs to a mix of fraud, litigation, legal loopholes and enforcement gaps.
Staged accidents have emerged as a growing concern, with increasingly sophisticated schemes targeting large insurance payouts or jury awards. In 2023, New York recorded 1,729 staged crashes, the second-highest figure nationwide. Reports of suspected motor vehicle insurance fraud have also surged, rising to 43,811 cases in 2025 from 24,238 in 2020 — an increase of about 80 percent over five years.
To address the issue, Hochul outlined a “whole-of-government” strategy focused on strengthening enforcement and closing legal gaps. Key proposals include creating new legal liabilities for individuals orchestrating staged crashes, restricting excessive compensation for those engaged in illegal or uninsured driving, and preventing at-fault parties from suing victims for damages.
The plan also seeks to tighten the legal definition of “serious injury” to ensure compensation for pain and suffering is reserved for verifiable cases. Additional measures aim to protect individuals with minimal fault from bearing disproportionate financial responsibility when other parties fail to pay.
Beyond enforcement, the governor’s proposals target industry practices. Insurers would be required to return excess profits above a defined threshold to policyholders, justify rate increases to regulators and consumers, and offer mandatory discounts tied to safe-driving technologies.
The reforms could also deliver broader financial benefits. A recent analysis by the Metropolitan Transportation Authority (MTA) estimates that the proposals would generate $48 million in recurring annual savings for the agency. Officials say the savings would stem from limiting costly settlements in cases where transit vehicles are not primarily at fault.
Hochul said she will work with the state legislature to advance the measures, framing the effort as essential to restoring fairness in the system and easing financial pressure on millions of New Yorkers.
