ALBANY, N.Y. — Gov. Kathy Hochul has announced a sweeping package of proposals aimed at reducing auto insurance costs across New York by cracking down on fraud, tightening legal standards and increasing transparency for consumers, according to a report published by Car Insurance 24, a website specializing in auto insurance news in the United States.

New Yorkers currently pay some of the highest car insurance premiums in the nation — averaging just over $4,000 per year, nearly $1,500 above the national average. Fraud, litigation loopholes and enforcement gaps have contributed significantly to rising costs, with staged crashes alone adding an estimated $300 annually to the average driver’s premium.

Hochul said car insurance is “not a luxury — it’s a necessity,” particularly in regions like Long Island where residents depend heavily on their vehicles for work, school and daily activities. She emphasized that the proposals are designed to hold bad actors accountable while protecting law-abiding drivers.

Surge in Fraud Cases

State data cited in the Car Insurance 24 report show a sharp increase in suspected fraud. In 2025, insurance carriers reported 43,811 suspected motor vehicle insurance fraud cases to the New York State Department of Financial Services — up from 24,238 in 2020, marking an 80% increase over five years. In 2023 alone, New York recorded 1,729 staged crashes, ranking second nationwide.

Key Elements of the Proposal

• Revitalizing the state’s Motor Vehicle Theft and Insurance Fraud Prevention Board.
• Expanding prosecutors’ authority to pursue criminal penalties against individuals who organize staged accidents.
• Cracking down on medical providers involved in fraudulent diagnoses tied to large insurance payouts.
• Targeting drivers who illegally register vehicles out of state to reduce insurance obligations.
• Extending the timeframe insurers have to investigate and report suspected fraud beyond the current 30-day limit.

Legal Reforms to Limit Excessive Payouts

Hochul is also seeking to limit non-economic damages — such as pain and suffering — for drivers engaged in criminal conduct at the time of an accident, including impaired or uninsured motorists. Additionally, the proposal would restrict compensation for drivers deemed mostly at fault in a crash.

The administration also plans to tighten the state’s “serious injury” threshold under its no-fault insurance system by establishing clearer medical standards, aiming to reduce costly and inconsistent litigation.

Consumer Transparency and Savings

If enacted, the reforms are expected to lower insurance costs and ensure that savings benefit consumers rather than insurers. The proposal would also require insurers to provide clearer explanations for rate increases and offer discounts to drivers who voluntarily participate in safe-driving programs.