In a release on Governor Kathy Hochul's affordability budget proposals, the New York State Department of Financial Services would take on a more proactive role in auto insurance fraud enforcement as part of a wider package aimed at lowering motor insurance costs in New York. The proposed reforms combine tougher action against staged crashes and related fraud with changes to insurers' anti-fraud tools and new limits on some damages claims. DFS, the Department of Motor Vehicles, New York State Police and the Division of Criminal Justice Services would be tasked with a more coordinated enforcement approach, including dedicated DFS and New York State Police staff focused on auto insurance. Other measures include reinvigorating the Motor Vehicle Theft and Insurance Fraud Prevention Board, allowing prosecutors to pursue organizers of staged accidents, targeting medical providers involved in fraudulent diagnoses, extending the current 30 day window for insurers to report suspected fraud and reducing barriers to alleging fraud in court while preserving consumer protections. The package would also cap non-economic damages for drivers engaged in criminal conduct at the time of an accident, including uninsured motorists and drivers convicted of impaired driving, limit damages where a driver is mostly at fault, and tighten New York's serious injury threshold. The release cites 43,811 suspected motor vehicle insurance fraud incidents reported to the DFS Insurance Frauds Bureau in 2025, up 80 percent over five years.
New York State Department of Financial Services 2026-04-28
New York State Department of Financial Services to receive expanded auto insurance fraud enforcement role under Hochul budget proposals
The New York State Department of Financial Services would take a more proactive role in auto insurance fraud enforcement under Governor Kathy Hochul’s affordability budget proposals, part of a broader package to lower motor insurance costs. The measures envisage coordinated enforcement with other state agencies, expanded tools to pursue staged accidents and related medical fraud, and extended reporting windows for suspected fraud. The package would also cap certain non-economic damages for drivers engaged in criminal conduct, limit damages where a driver is mostly at fault, and tighten New York’s serious injury threshold amid an 80 percent rise in suspected motor vehicle insurance fraud incidents over five years.