Reforms will lower auto insurance rates for New Yorkers

Gov. Kathy Hochul has signed a package of reforms in the new state budget that will provide relief to New Yorkers with lower car insurance premiums.

Hochul announced the reforms, part of the FY27 enacted budget, May 27. The changes are meant to “battle fraud, limit damages paid out to bad actors and ensure that consumers, not insurance companies, are prioritized.”

Her office says the reforms build on her work to make the state more affordable and put money back in consumers’ pockets.

“Outdated laws, special interest loopholes and jackpot insurance payouts to bad actors have long forced New Yorkers to pay some of the highest car insurance rates in the nation,” Hochul said. “These hard-fought reforms are a win for every New Yorker who depends on a car to go to work or drop their kids at school.

“But it’s bigger than that – I’ve heard from farmers who say these reforms will lower the cost of getting their goods to market and from construction supply companies who say this will lower the cost of building. This is how we are delivering on the promise to tackle the affordability crisis head on.”

According to the governor’s office, New York insurance rates average slightly more than $4,000 annually. That’s nearly $1,500 above the national average.

Hochul’s office says car insurance rates are driven up by a combination of fraud, litigation, legal loopholes and enforcement gaps. Staged crashes and associated insurance fraud inflate premiums up to $300 a year, according to some estimates.

“New York’s broken insurance system is not just hurting those who rely on a car to get around, but local businesses that rely on trucking to make ends meet,” Hochul said.

The FY27 enacted budget also includes provisions that enable prosecutors to seek criminal penalties against any individual responsible for organizing a staged accident, not just the particular individual behind the wheel.

Florida’s 2023 tort reforms partly inspired Hochul’s actionsAn analysis by Florida’s Office of Insurance Regulation shows how its 2023 tort reform package has resulted in a 5.6 percent decrease in the average auto insurance rates across the majority of its market.

For example, in 2025, Florida’s largest carrier returned nearly $1 billion in excess profits to 2.7 million policyholders. Florida has seen its double-digit growth of auto insurance rates in 2023 turn into a 7.4 percent reduction in the average rates by 2025.

A national organization dedicated to standing up for plaintiffs, victims and consumers praised Hochul’s signing of the reforms.

“Today’s budget signing marks an important step toward bringing down insurance costs for New Yorkers,” said Lauren Zelt, executive director of Protecting American Consumers Together (PACT). “States that have taken action to curb lawsuit abuse and combat fraud have seen stronger insurance markets and greater affordability for consumers.

“These reforms are welcome news for New York families, drivers and small businesses feeling the strain of rising costs.”

PACT has been pushing these reforms in the Empire State. That includes a series of television ads in the last few months – including one that highlights the success of Florida’s reforms – as well as digital ads, an op-ed piece in Newsday and a one-page about the state’s “sky-high” lawsuit economy that showed how fraud, staged accidents, frivolous lawsuits and legal exploitation are driving up costs and making New York increasingly unaffordable.