New York State Department of Financial Services to step up auto insurance fraud enforcement and add profitability checks for home insurers under Governor Hochul proposals

The New York State Department of Financial Services (DFS) published Governor Kathy Hochul’s 2026 State of the State affordability proposals, including insurance-focused measures aimed at lowering auto and home insurance costs through tougher anti-fraud enforcement, new oversight of insurer profitability, and expanded rate transparency. On auto insurance, the plan targets staged-crash fraud, citing 1,729 staged crashes in New York State in 2023 and 38,270 suspected motor vehicle insurance fraud incidents reported to the DFS Insurance Frauds Bureau. It would reinvigorate the State’s Motor Vehicle Theft and Insurance Fraud Prevention Board and task DFS, the Department of Motor Vehicles, the Division of Criminal Justice Services, and the New York State Police with a more proactive, coordinated enforcement approach with dedicated resources and staff at DFS and the New York State Police, while enabling criminal penalties for those organizing staged accidents and seeking to prevent sizeable payouts to bad actors. The proposals also include requiring insurers to notify policyholders about rate changes, safeguards intended to ensure consumers benefit from reforms, and requirements for insurers to provide benefits that incentivize safe driving. On home insurance, the plan would create a “first-in-the-nation” check on home insurer profitability by requiring carriers with more than two consecutive years of outsized profit margins to lower rates or submit a justification for continued rates, subject to DFS review, alongside expanded automatic discounts for safety and weatherproofing upgrades for homeowners and commercial multifamily properties.