The New York State Department of Financial Services published an update setting out Governor Kathy Hochul’s proposals to reduce New York auto insurance costs, combining a tougher anti-fraud enforcement agenda with changes to damages, liability allocation and no-fault litigation thresholds. The package is framed against average annual premiums of just over USD 4,000 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. Measures include reinvigorating the Motor Vehicle Theft and Insurance Fraud Prevention Board, expanding prosecutors’ ability to pursue organizers of staged crashes, coordinating with District Attorneys, targeting medical providers alleged to support fraudulent claims, and addressing illegal out-of-state vehicle registrations. Legislative changes would also give insurers more time than the current 30-day window to identify and report suspected fraud and reduce barriers to alleging fraud in court, cap certain non-economic damages for drivers engaged in unlawful conduct at the time of an accident (including uninsured motorists, impaired driving convictions and felony-related conduct), limit damages for drivers who are “mostly” at fault, tighten the “serious injury” threshold with objective medical standards, and reform joint and several liability so defendants under 50 percent at fault are responsible only for the non-economic damages they caused. Separately, insurers would be required to provide policyholders notice and explanations for rate changes and to offer discounts when drivers voluntarily opt into programs intended to reduce unsafe driving and fraud. If the reforms are enacted, the Governor would direct DFS to re-examine the Excess Profit Law, including the threshold that triggers returns to policyholders.
New York State Department of Financial Services 2026-02-11
New York State Department of Financial Services highlights Governor Hochul proposals to lower auto insurance premiums by tightening fraud and liability rules
The New York State Department of Financial Services outlined Governor Kathy Hochul’s proposals to lower auto insurance costs in New York, focusing on anti-fraud measures, liability reforms, and litigation threshold adjustments. Key initiatives include enhancing fraud prevention, expanding prosecutorial powers, revising damages and liability rules, and requiring insurers to notify policyholders of rate changes and offer discounts for safe driving.