The New York State Department of Financial Services (DFS) published an update outlining Governor Kathy Hochul’s proposals to lower motor vehicle insurance premiums in New York by expanding anti-fraud tools and changing liability and damages rules that affect claim costs. The package is framed against average annual car insurance costs of just over USD 4,000, nearly USD 1,500 above the national average, and a rise in suspected motor vehicle insurance fraud reports to DFS’s Insurance Frauds Bureau to 43,811 in 2025 from 24,238 in 2020. The proposals include reinvigorating the State’s Motor Vehicle Theft and Insurance Fraud Prevention Board, pursuing legislation to allow criminal penalties for organizers of staged crashes, partnering with District Attorneys, strengthening actions against medical providers alleged to support fraudulent claims, and taking action against illegal out-of-state vehicle registration. On insurer processes, the Governor would seek to extend the current 30-day window for insurers to identify and report fraud and reduce barriers to alleging fraud in court. Civil-law changes would cap non-economic damages for drivers engaged in unlawful behavior at the time of an incident, limit damages recoverable by drivers deemed “mostly” at fault, tighten the no-fault “serious injury” threshold through objective medical standards, and reform joint and several liability so defendants less than 50 percent at fault are responsible only for their share of non-economic damages. Several elements are presented as changes to state law. If the reforms are enacted, the Governor would direct DFS to re-examine the Excess Profit Law, including the current profit threshold trigger for returning excess profits to policyholders, and would require insurers to provide policyholders with notifications and explanations for rate changes and to offer discounts when drivers voluntarily opt into programs shown to reduce unsafe driving and fraud.
New York State Department of Financial Services 2026-02-03
New York State Department of Financial Services sets out Governor Hochul proposals to cut auto insurance costs by targeting fraud and limiting damages
The New York State Department of Financial Services detailed Governor Kathy Hochul’s proposals to lower motor vehicle insurance premiums by enhancing anti-fraud measures and revising liability and damages rules, amid rising insurance costs and fraud reports. Key initiatives include legislative changes to penalize staged crash organizers, reforms to insurer fraud reporting processes, and civil-law adjustments to cap non-economic damages and reform liability rules.