Governor Kathy Hochul has announced a series of proposals aimed at reducing auto insurance costs and addressing fraudulent claims throughout New York State. These measures are intended to address rising premiums and target fraud that increases financial burdens for drivers.
According to Governor Hochul, “For most people, car insurance isn’t a luxury — it’s a necessity, especially here on Long Island where people rely on their cars to get to work, get to school or even go grocery shopping. These common sense proposals will crack down on the bad actors that are driving up the cost of car insurance and putting that financial burden on innocent, hardworking New Yorkers.”
Data indicates that New Yorkers pay some of the highest car insurance rates in the country, averaging just over $4,000 annually—nearly $1,500 above the national average. Factors such as fraud, litigation, legal loopholes, and enforcement gaps contribute to these elevated rates. Staged crashes and related insurance fraud are estimated to increase premiums by as much as $300 per year for each policyholder.
In 2023, there were 1,729 staged crashes in New York State, making it second highest in the nation for such incidents. Insurance carriers reported 43,811 suspected motor vehicle insurance fraud cases to the New York State Department of Financial Services Insurance Frauds Bureau in 2025—an 80 percent increase from 24,238 cases in 2020.
To address these issues, Governor Hochul is proposing several initiatives:
– Revitalizing the Motor Vehicle Theft and Insurance Fraud Prevention Board to improve investigations and prosecutions.
– Introducing legislation allowing prosecutors to seek criminal penalties against anyone organizing staged accidents.
– Partnering with District Attorneys statewide to build stronger cases against organized fraud.
– Increasing scrutiny of medical providers involved in fraudulent claims.
– Addressing illegal out-of-state vehicle registrations that impact costs for law-abiding drivers.
Additionally, current law limits insurers’ ability to report fraud by capping reporting time at 30 days. The Governor seeks to extend this period and reduce barriers for alleging fraud in court while maintaining consumer protections.
The proposals also include limiting non-economic damages payouts for individuals engaged in unlawful behavior during an accident—such as impaired or uninsured drivers—and restricting recovery of damages for those mostly at fault in accidents. There will be reforms to tighten definitions around what constitutes a “serious injury” under no-fault laws by introducing objective medical standards.
On liability reform, changes would ensure defendants less than 50 percent at fault in multi-defendant cases are only responsible for their share of damages. This could help lower premiums since insurers would not have to account for unrelated liabilities.
The Excess Profit Law requires insurers who make profits above a set threshold to return excess funds directly to policyholders. With anticipated savings from these reforms, Governor Hochul intends for the Department of Financial Services (DFS) to review whether current profit thresholds remain appropriate so consumers benefit from any reductions.
To improve transparency, insurers would be required to notify policyholders about rate changes and explain reasons behind adjustments. The proposals also encourage discounts for drivers who opt into programs proven to reduce unsafe driving or fraud.
Local leaders expressed support for these measures. Suffolk County Legislature Minority Leader Jason A. Richberg said: “Across the board, New Yorkers are getting hit where it hurts most — their wallets — and it’s essential that we do everything in our power to lighten that load…Governor Hochul’s focus on cracking down on staged crashes and closing costly loopholes will help lower those premiums and have a meaningful impact on working families’ monthly budgets.”
Suffolk County Legislator Tom Donnelly stated: “All across Suffolk County and New York State…paying some of the highest car insurance premiums in the country makes it even more difficult and challenging. I thank Governor Hochul for leading the way in looking at how to control rising auto insurance rates so that our hard-working residents can continue to afford and stay here.”
Other community leaders—including Town of Babylon Supervisor Rich Schaffer; Best Way Auto Collision owner Ibrahim Duman; Suffolk County Alliance of Chambers Chairman Bob Fonti; Suffolk Transportation Service President John Corrado; LI Main Street Alliance Director Eric Alexander; Long Island African American Chamber President Phil Andrews; and Long Beach Latino Civic Association Executive Director Helen Dorado Alessi—echoed support for tackling fraudulent claims and bringing down costs for residents.