Hochul announces auto insurance reforms aimed at lowering premiums in New York

Gov. Kathy Hochul recently announced a series of auto insurance reforms included in New York's fiscal year 2027 budget that state officials say are aimed at reducing premiums by cracking down on fraud, limiting certain lawsuit damages and tightening oversight of insurers.

The proposal includes criminal penalties for organizing staged crashes, stricter standards for defining what qualifies as a "serious injury" in auto-related lawsuits, and limits on damage awards for drivers found to be mostly at fault or engaged in criminal activity at the time of a crash. State officials said the changes are intended to curb what they describe as system abuse that contributes to higher costs for motorists.

The budget also increases regulatory authority over insurers, including restrictions on rate increases and profit margins without approval from the state Department of Financial Services. It further bars insurers from using certain non-driving-related factors such as ZIP code, education level, occupation or homeownership status when setting premiums.

Hochul said New Yorkers currently pay some of the highest auto insurance rates in the country, averaging more than $4,000 annually, and argued the reforms are designed to bring relief to both drivers and businesses that depend on transportation.

The proposal now heads into implementation as part of the broader state budget package, which lawmakers approved earlier this year.