The New York State Department of Financial Services has published Governor Kathy Hochul’s outline of auto insurance reforms in New York’s FY27 Enacted Budget, which aim to reduce premiums by targeting staged-accident fraud, narrowing litigation and tightening oversight of insurer pricing. The package caps damages for drivers engaged in unlawful conduct at the time of an accident, tightens the definition of "serious injury" for pain and suffering or emotional distress claims, bars drivers found to be "mostly" at fault from suing their victims for outsized damages, and requires express approval from the Department of Financial Services before insurers raise rates. The measures also allow prosecutors to seek criminal penalties against anyone who organizes a staged accident, not only the driver involved. On pricing, the budget sets a legal threshold intended to prevent excess profits and return savings to consumers, and it prohibits insurers from using homeownership status, occupation, education level or zip code in setting rates. The release said New Yorkers pay slightly more than USD 4,000 a year on average for auto insurance, nearly USD 1,500 above the national average, and that staged crashes may add up to USD 300 a year to premiums.
New York State Department of Financial Services2026-05-27
New York State Department of Financial Services outlines enacted budget auto insurance reforms capping some damages and requiring approval for rate hikes
The New York State Department of Financial Services published Governor Kathy Hochul’s auto insurance reform package in the FY27 Enacted Budget, targeting staged-accident fraud, litigation and insurer pricing to reduce premiums. The measures tighten eligibility for damages, expand criminal penalties for organizing staged accidents, require prior Department approval for rate increases, cap excess profits and bar the use of homeownership, occupation, education level or zip code in pricing.