On Jan. 22, 2026, Governor Kathy Hochul announced a series of proposals aimed at reducing auto insurance costs for New York drivers by addressing fraudulent claims and increasing transparency in the industry.
The initiative comes as New York drivers face some of the highest auto insurance rates in the country, with average annual premiums exceeding $4,000—nearly $1,500 above the national average. Fraud and staged crashes are significant contributors to these elevated costs. Insurers reported more than 38,000 suspected motor vehicle insurance fraud incidents in 2023, including over 1,700 staged accidents. These expenses are passed along to all policyholders through higher premiums. According to a press release from the Department of Financial Services, Governor Hochul’s measures target fraud, staged crashes, litigation abuses, and enforcement gaps to reduce vehicle insurance rates and deliver savings to drivers.
“Since taking office, my top priorities have been to make New York more affordable and protect New Yorkers — and that’s why I proposed measures to bring down auto insurance costs and battle fraudulent claims that are driving up costs for everyone (…) These common-sense proposals will not only increase auto insurance transparency for New Yorkers, but they will also put money back into people’s pockets, especially during a time when the cost of living is just too high,” Governor Hochul said.
The proposed reforms include creating a new cross-agency task force, increasing penalties for staged crashes, limiting certain payouts and strengthening prosecution of fraud rings and complicit providers. These steps aim to address the root causes of high insurance costs and produce direct savings for families and businesses across the state. The proposals have received support from law enforcement agencies, business groups, consumer advocates, and elected officials throughout New York.
Hochul has served as Governor since 2021 and is the first female governor in state history. She previously held positions as Lieutenant Governor and U.S. Representative for New York’s 26th Congressional District after beginning her public service career on the Hamburg Town Board and as Erie County Clerk. Her administration has focused on economic issues including efforts to reduce costs for residents.
