Deal on Auto Insurance Changes Could Lower Rates. But How Soon?

New York Public News Network | By Samuel King

Gov. Kathy Hochul and legislative leaders seem to have reached a compromise on auto insurance reform.

It was a key priority of Gov. Kathy Hochul, who is seeking to lower rates as part of what she calls her affordability agenda. The changes will be part of a state budget deal that has yet to be finalized.

Plans are to limit payouts to those found to be at fault in crashes and narrow the serious injury threshold for damages.

“New York’s broken system was driving up costs for families and businesses — staged crashes, organized fraud rings, corrupt doctors and legal loopholes that bad actors have exploited for years,” Hochul said. “But that nightmare ends with this budget.”

The plan also includes provisions to combat fraud, which also leads to higher premiums, said Assemblymember David Weprin, a Queens Democrat who leads the chamber’s insurance committee. He spearheaded “Alice’s Law” in 2019, which cracked down on staged crashes.

“It’ll take a while till we can actually see the reduction,” he said, “but I think you’re gonna be able to see it, you know, within a reasonable period of time.”

The deal also includes provisions sought by other legislators like Assemblymember Jen Lunsford, D-Perinton, like the requirement that all rate increases be approved by regulators, instead of the current system where any increase of 5% or less is automatically approved.

Jen Lunsford

Insurance companies would also be prohibited from using factors like a customer’s education level or ZIP code when setting rates.

Without those provisions, Lunsford said, the savings under the governor’s plan would have been few.

“I think that the inclusion of those along with the governor’s fraud provisions will go a long way towards delivering actual results for regular New York auto insurance consumers,” Lunsford said.

The compromise also preserves a standard Hochul had sought to pare down, which is known as joint and several liability. That legal standard applies in cases where multiple parties are at fault and allows the injured person to recover full damages from one or all of them, depending on their level of coverage.

Hochul’s proposal unleashed an intense lobbying effort on both sides of the issue. Uber was a big supporter of the plan, arguing that it will lead to lower costs for consumers and their riders.

Josh Gold, a senior director on Uber’s public policy team, said 25% of a rider’s fare goes to insurance, double the rest of the country.

“And so that’s really due to fraud and litigation abuse, and what our leaders in Albany have done here is taken a hammer to that and said, ‘You know, it’s too much,’” Gold said. “New Yorkers can’t pay higher costs than everybody else in the country, either for an Uber ride or for their personal auto insurance. And this compromise will help bring that number down.”

On the other side was the powerful New York Trial Lawyers Association, which after the governor’s announcement of a “general agreement” on a budget, said it was still “troubled” about certain aspects of the auto insurance measures.

That includes changes to the state’s comparative negligence standard, which would mean if a driver is found more than 50% at fault for a crash, they would not be able to collect damages in court. Currently, they would be eligible for damages on a sliding scale.

“Think of a situation where someone is 51% at fault versus 49% at fault,” Lunsford said. “Even if the person’s 51% at fault has a substantial life altering injury, they get nothing and the other person who broke their clavicle gets something. That just seems patently unfair.”

The trial lawyers association said it would be willing to work with the governor on more reforms. While Lunsford also said she would be looking to develop legislation targeting fraud and abuse in the state’s no-fault insurance system for next year’s session.

Image: Gov. Kathy Hochul joins other leaders and advocates on March 18, 2026, in Albany to highlight her proposed 2026 State of the State auto insurance reforms. (Mike Groll/Office of the Governor)