Governor Kathy Hochul has announced a series of proposals aimed at reducing vehicle insurance costs and addressing fraudulent claims in New York State. The measures are intended to combat rising insurance premiums, which average just over $4,000 annually in the state—about $1,500 higher than the national average.
“New Yorkers know all too well that the cost of car insurance is just way too high, and for most, having a car is a daily necessity whether you’re required to travel for work or to run errands,” Governor Hochul said. “These common-sense proposals will not only crack down on fraudulent claims that drive up the cost of car insurance, they’ll put money back into the pockets of hardworking New Yorkers, allowing them a sense of relief.”
The state has seen an increase in staged accidents and suspected motor vehicle insurance fraud. In 2023, there were 1,729 reported staged crashes in New York—the second highest number nationwide. Reports of suspected auto insurance fraud rose from 24,238 cases in 2020 to 43,811 in 2025, marking an 80 percent increase over five years.
To address these issues, Governor Hochul’s plan includes revitalizing the Motor Vehicle Theft and Insurance Fraud Prevention Board to enhance investigations and prosecutions. She also proposes legislation enabling prosecutors to seek criminal penalties against anyone organizing staged accidents—not just drivers involved—and partnerships with district attorneys across the state to target organized fraud operations. Efforts will also focus on medical providers who participate in fraudulent activities and on drivers who register vehicles out-of-state to avoid proper coverage.
Current laws limit insurers’ ability to detect and report fraud by capping reporting timeframes at 30 days. Hochul’s proposal would extend this period and reduce legal barriers for insurers pursuing fraud cases while maintaining consumer protections.
She also plans changes regarding damages awarded after accidents. Individuals found engaging in unlawful behavior during an incident—including impaired driving or fleeing a felony—would see limits placed on non-economic damage payouts such as pain and suffering. Additionally, New York’s rules currently allow drivers mostly at fault in an accident to claim significant damages; proposed reforms would restrict this practice by introducing stricter accountability standards.
The definition of “serious injury” under New York’s no-fault law is considered vague and inconsistently applied. Hochul aims to set clearer medical criteria for serious injuries to prevent excessive litigation and unwarranted payouts.
Further changes would reform joint liability rules so that defendants less than 50 percent at fault are only responsible for their share of non-economic damages—a move that aligns with practices in most other states and could help lower premiums.
Since the 1970s, regulations have required insurers to return excess profits above certain thresholds directly to policyholders. If the new reforms reduce coverage costs as expected, Governor Hochul intends for regulators to review these thresholds so consumers benefit from any savings.
Additional measures include requiring insurers to provide clear explanations when rates change and mandating discounts for drivers who opt into safe-driving programs proven effective at reducing risk.
“New Yorkers know all too well that the cost of car insurance is just way too high, and for most, having a car is a daily necessity whether you’re required to travel for work or to run errands.” — Governor Kathy Hochul
