The Citizens Budget Commission announced that it supports Governor Kathy Hochul’s proposed auto insurance reforms, saying that lawsuit abuse, fraud, and inflated claims are contributing to higher premiums for New Yorkers.
The commission said the issue is not just about how rates are set but stems from structural problems in New York’s insurance system. According to the Citizens Budget Commission, “CBC’s testimony frames New York’s insurance problem as a structural cost issue, not simply a rate-setting dispute. It says the state’s current rules encourage fraudulent, exaggerated, and litigation-heavy claims, especially through mandatory no-fault coverage and auto-specific exposure to joint and several liability. In that telling, excessive lawsuits are not a side effect but a cost driver: once claims severity and legal expenses rise, insurers spread those losses across the broader pool of policyholders, leaving ordinary drivers and businesses to absorb the added cost through higher premiums,” according to the Citizens Budget Commission.
The commission also reported that New Yorkers paid $24 billion in auto insurance premiums in 2024. The average premium reached $1,896 in 2023—about 32% above the national average. The organization said reforms similar to those enacted in other states could reduce premiums by roughly 10%, or at least $200 per vehicle annually.
Other organizations have identified similar trends. The Partnership for New York City said auto insurance costs in the state are significantly higher than the national average due to fraud and litigation. The Insurance Information Institute reported that insurers paid out more than $1.10 in claims and expenses for every $1 collected in premiums in 2023.
The Citizens Budget Commission is a nonpartisan New York fiscal watchdog founded in 1932. It is headquartered in New York City with offices listed in Manhattan and Albany. Its mission is “to achieve constructive change in the finances, services, and policies of New York City and New York State government” according to the organization.
