The New York State Department of Financial Services published an overview of Governor Kathy Hochul’s proposed package to reduce New York vehicle insurance costs by strengthening fraud enforcement and recalibrating auto claims and litigation rules. The proposals span tougher tools against staged accidents and suspected fraud, limits on certain non-economic damages, updates to no-fault thresholds, and new insurer requirements on rate transparency and safe-driving incentives. The release cites high premiums of just over USD 4,000 annually on average and growing fraud indicators, including 1,729 staged crashes and 38,270 suspected motor vehicle insurance fraud reports to DFS’s Insurance Frauds Bureau in 2023. Measures include reinvigorating the Motor Vehicle Theft and Insurance Fraud Prevention Board, expanding criminal liability for individuals who organise staged accidents, and heightened focus on fraudulent medical providers and illegal out-of-state vehicle registration. On insurer operations, the Governor proposes extending the current 30-day window for insurers to identify and report fraud and reducing barriers to alleging fraud in court. Claims and liability changes would cap non-economic damages for drivers engaging in unlawful behaviour at the time of an accident, limit non-economic damages for drivers deemed mostly at fault, tighten the “serious injury” threshold with objective medical standards, and reform joint and several liability so defendants less than 50 percent at fault are responsible only for the damages they caused. Additional measures would require insurers to notify and explain rate changes to policyholders and to offer discounts when drivers voluntarily opt into programmes shown to reduce unsafe driving and fraud. Several elements are framed as legislative proposals, and DFS would be directed to re-examine the Excess Profit Law’s threshold trigger if the broader reforms are enacted.
New York State Department of Financial Services 2026-01-22
New York State Department of Financial Services outlines Governor Hochul proposals to cut auto insurance premiums through anti-fraud and liability reforms
The New York State Department of Financial Services outlined Governor Kathy Hochul’s proposed measures to lower vehicle insurance costs by enhancing fraud enforcement and revising auto claims and litigation rules. This includes stricter penalties for staged accidents and fraud, limits on non-economic damages, and new insurer requirements for rate transparency and safe-driving incentives. The proposals also involve extending the fraud reporting window for insurers, capping non-economic damages for at-fault drivers, and reforming liability rules, with some elements requiring legislative approval.