Governor Kathy Hochul has announced a series of proposals aimed at reducing vehicle insurance costs and addressing fraudulent claims in New York State. The measures are designed to combat fraud, limit payouts to those acting unlawfully, and ensure that consumers benefit from any savings.
“New Yorkers know all too well that the cost of car insurance is just way too high, and for most, having a car is a daily necessity whether you’re required to travel for work or to run errands,” Governor Hochul said. “These common-sense proposals will not only crack down on fraudulent claims that drive up the cost of car insurance, they’ll put money back into the pockets of hardworking New Yorkers, allowing them a sense of relief.”
According to state data, New Yorkers pay over $4,000 annually on average for car insurance—about $1,500 more than the national average. Factors contributing to these high rates include fraud, litigation costs, legal loopholes, and enforcement gaps. Staged crashes and related fraud are estimated to increase premiums by as much as $300 per year for each policyholder.
In 2023 alone, there were 1,729 staged crashes reported in New York State. The state ranks second nationally for such incidents. Insurance carriers reported 43,811 suspected motor vehicle insurance fraud cases to the Department of Financial Services (DFS) Insurance Frauds Bureau in 2025—an 80 percent increase from five years prior.
To address these issues, Governor Hochul’s plan includes reinvigorating the Motor Vehicle Theft and Insurance Fraud Prevention Board and empowering it to better support investigations and prosecutions statewide. Legislation will also allow prosecutors to seek criminal penalties against anyone organizing staged accidents—not just drivers involved—and will strengthen actions against medical providers who participate in fraudulent schemes.
The Governor’s proposals would extend the time insurers have to report suspected fraud beyond the current 30-day limit. This aims to give insurers more flexibility in investigating claims while maintaining consumer protections.
Another aspect targets limiting damages paid out when individuals engage in unlawful behavior during an accident. Under current law, even those committing crimes like impaired driving can receive significant payouts for non-economic damages such as pain and suffering. The proposed changes would cap such payouts for uninsured motorists or those convicted of offenses at the time of an incident.
Additionally, reforms would limit damages recoverable by drivers found “mostly” at fault in an accident—a practice already adopted by most states—and tighten definitions around what constitutes a serious injury under no-fault insurance laws.
The Governor also seeks changes regarding joint and several liability so that defendants less than 50 percent at fault would only be responsible for their share of non-economic damages. This move aligns with practices in 28 other states and could allow insurers to lower premiums since they would not need to cover damages caused by others.
Consumer protection measures are also included. The DFS Excess Profit Law requires auto insurers to return excess profits above a certain threshold directly to policyholders; if reforms lower coverage costs as expected, DFS may review this threshold further.
Hochul’s plan calls for greater transparency from insurers about rate increases and requires explanations when premiums rise. She also proposes that insurers offer discounts when drivers voluntarily join programs proven to reduce unsafe driving or fraud.
“New Yorkers know all too well that the cost of car insurance is just way too high, and for most, having a car is a daily necessity whether you’re required to travel for work or to run errands.” Governor Kathy Hochul said.