Governor Kathy Hochul has announced a series of proposals aimed at reducing auto insurance costs and addressing fraudulent claims throughout New York State. The initiatives are designed to address factors contributing to high premiums, such as fraud, litigation, legal loopholes, and enforcement gaps.
“For most people, car insurance isn’t a luxury — it’s a necessity, especially here on Long Island where people rely on their cars to get to work, get to school or even go grocery shopping,” Governor Hochul said. “These common sense proposals will crack down on the bad actors that are driving up the cost of car insurance and putting that financial burden on innocent, hardworking New Yorkers.”
New York drivers pay some of the highest auto insurance rates in the country, averaging just over $4,000 annually—about $1,500 more than the national average. Fraudulent activities like staged crashes have been identified as major contributors to these elevated costs. In 2023 alone, there were 1,729 reported staged crashes in New York State. Insurance carriers also reported 43,811 suspected motor vehicle insurance fraud incidents to the Department of Financial Services (DFS) Insurance Frauds Bureau in 2025—an increase of 80 percent from 2020.
To combat these issues, Governor Hochul plans to reinvigorate the Motor Vehicle Theft and Insurance Fraud Prevention Board and empower it with greater investigative and prosecutorial capabilities. Proposed legislation would allow prosecutors to seek criminal penalties against anyone organizing staged accidents. The state will also work with District Attorneys to build stronger cases against organized fraud networks and target medical providers who participate in fraudulent schemes.
Another aspect of the plan is strengthening insurer anti-fraud programs by extending the timeframe insurers have to report suspected fraud beyond the current 30-day limit. This measure aims to give insurers more time for thorough investigations while maintaining consumer protections.
The proposals also include capping non-economic damages for individuals engaged in unlawful behavior at the time of an accident—such as uninsured motorists or those convicted of impaired driving—and limiting payouts for drivers who are mostly at fault in accidents. Additionally, reforms will clarify what constitutes a “serious injury” under no-fault law by introducing objective medical standards.
Governor Hochul stated: “These common sense proposals will crack down on the bad actors that are driving up the cost of car insurance and putting that financial burden on innocent, hardworking New Yorkers.”
The reform package seeks changes in joint and several liability rules so defendants less than 50 percent at fault would only be responsible for their share of damages—a standard already adopted by 28 other states. This could help lower premiums by ensuring insurers only cover damages caused by their policyholders.
To ensure consumers benefit from any savings generated by these reforms, DFS may re-examine its Excess Profit Law threshold if costs decrease significantly after implementation. The Governor is also calling for increased transparency; insurers would be required to notify policyholders about rate changes and explain their reasons.
Further measures encourage safe driving through technology-based discount programs offered by insurers when drivers voluntarily participate.
Local officials expressed support for these efforts:
Suffolk County Legislature Minority Leader Jason A. Richberg said: “Across the board, New Yorkers are getting hit where it hurts most — their wallets — and it’s essential that we do everything in our power to lighten that load. On Long Island, families depend on their cars to get to work, school, and medical appointments, and they shouldn’t be punished with insurance premiums among the highest in the country because of fraud and abuse in the system. Governor Hochul’s focus on cracking down on staged crashes and closing costly loopholes will help lower those premiums and have a meaningful impact on working families’ monthly budgets. This is about affordability, fairness, and putting the needs of hardworking residents ahead of insurance companies.”
Suffolk County Legislator Tom Donnelly added: “All across Suffolk County and New York State, costs are already high with people having to figure out how they will be able to pay utility bills, groceries, healthcare and other necessities. Paying some of the highest car insurance premiums in the country makes it even more difficult and challenging. I thank Governor Hochul for leading the way in looking at how to control rising auto insurance rates so that our hard-working residents can continue to afford and stay here.”
Town of Babylon Supervisor Rich Schaffer said: “On Long Island, where families are already facing a high cost of living, rising car insurance premiums caused by staged accidents and fraud only add to the financial strain. These scams drive up costs for responsible drivers who play by the rules. I thank Governor Hochul for her leadership in tackling insurance fraud and fighting to put real money back into the pockets of Long Island residents.”
Best Way Auto Collision owner Ibrahim Duman commented: “Running an auto body shop on Long Island, you see how hard people work and how frustrating it is when their insurance costs keep going up. A lot of that comes from fraudulent claims. It means higher premiums for customers who did nothing wrong. I appreciate Governor Hochul coming here and taking this issue seriously because it’s something that affects our customers and our community too often.”
Other local business leaders echoed similar sentiments regarding affordability challenges posed by high auto insurance rates.
