Governor Kathy Hochul announced on Mar. 13 that her proposal to lower the cost of auto insurance would result in $48 million in annual recurring savings for the Metropolitan Transportation Authority (MTA). The plan aims to change laws that currently require the MTA to pay large settlements for crashes where their buses are not primarily at fault.
The proposed reforms are significant because they would allow the MTA to redirect funds previously used for legal payouts into improving transit services. According to Hochul, “New York’s broken insurance system is not just hurting those who rely on a car to get around, but the millions of New Yorkers who take trains and buses every day.” She added, “If our common sense reforms get passed in this year’s Budget, we will produce tens of millions of dollars in annual savings, all of which can go right back to running the better, more frequent transit service that every New Yorker deserves.”
All funds saved through these reforms—estimated at $48 million annually—will be available for investment in operating subways, buses, and railroads. The MTA also found that similar changes could generate up to $25 million in yearly savings for more than 130 other transit agencies across New York State.
MTA Chair and CEO Janno Lieber said, “Governor Hochul’s common sense auto insurance reform will substantially reduce MTA’s exposure to windfall payouts for questionable lawsuits. Every dollar saved can be redirected back where it belongs: to delivering more frequent, more reliable transit service for New Yorkers.” Marie Therese Dominguez, Commissioner of the New York State Department of Transportation, said these reforms would help public transit agencies focus resources on serving riders instead of fighting lawsuits. Kaitlin Asrow, Acting Superintendent of the Department of Financial Services, said DFS is working with other agencies “to make our roads safer and deliver meaningful savings to New Yorkers.”
The reform package includes measures such as targeting fraud related to staged accidents; preventing large payments beyond medical or wage reimbursement for those committing crimes or driving uninsured; clarifying what constitutes a serious injury; ensuring those minimally responsible are not left paying full damages if others do not pay; requiring insurers to return excess profits above reasonable thresholds; and mandating technology discounts that encourage safe driving.
These proposals are part of Governor Hochul’s broader support for public transportation included in her FY 2027 Executive Budget. Other initiatives include continued investment in modernizing infrastructure and increasing funding for non-MTA public transit agencies by over five percent Upstate and over seven percent Downstate. The Legislature will consider these proposals as part of the budget process ahead of the April 1 deadline.