Gov. Kathy Hochul held a rally Wednesday at the state Capitol in support of her executive budget proposal to change car insurance policies in an effort to lower rates.
It comes as Hochul prepares to negotiate her more than $260 billion budget proposal with state lawmakers, a plan she insists is focused on affordability.
Hochul’s complex proposal largely centers on limiting damages sought by bad actors, supported by a litany of individual measures included in the plan — with the hope that the collection of proposals will bring insurance rates down by reducing fraudulent claims.
A cornerstone of the Uber-backed proposal is targeting elaborate insurance schemes centered on staged car accidents, but it has encountered opposition from some lawmakers and the state’s trial lawyers.
“I encourage them to come to the table and work with us. They cannot believe this is a rational system,” she said. “People who violate laws and commit accidents can have a huge payout, a jackpot payout, in the courtroom. No one should accept that as rational or normal.”
The state Senate and Assembly declined to pitch their own variations of the proposal in their one-house budgets. While the Assembly traditionally does not include policy in its rebuttal, Senate Majority Leader Andrea Stewart-Cousins said last week that the Senate did not take up the car insurance issue because she believes it will require extensive discussion.
“I will look at all ideas that the Legislature brings to us,” Hochul said.
It appears that the conversation will indeed be extensive. Hochul was asked whether she was willing to drag the car insurance fight out as long as last year’s battle over her preferred changes to the state’s discovery laws — one which went well into April and pushed the overall budget deal into May:
“I’m on a mission to get this done,” she said, reminding reporters that she does not reveal details of negotiations publicly. “New Yorkers deserve this. They need elected officials who are willing to take on the deeply entrenched interests that have prohibited anyone from even retouching reforms in our legal system or going after criminals. We need a little bit more courage in public life these days.”
The governor decried those who oppose the changes — every last one of them — quipping that they fit into two categories: special interest groups and people who have been influenced by them.
“Do I have to tell you how Albany works?” she asked reporters.
Some of the stiffest opposition has come from trial lawyers.
Jeff S. Korek, past president of the New York State Trial Lawyers Association and senior trial partner at GLK Law, told Spectrum News 1 that Hochul’s proposal will not address affordability because it risks shifting costs onto drivers and off insurers by threatening coverage and, in some cases, limiting options for legal recourse when an accident occurs.
“She’s without the Legislature interested in making these reforms because the Legislature, the Senate and Assembly, understand that these changes are going to fall on the shoulders of everyday people who are driving cars and not on the insurers, where they should be,” he said.
Opponents of the proposal, like Korek, have consistently argued that even if some of the law accomplishes its goals, the idea that insurance companies will voluntarily lower rates if costs go down is dubious.
“The only things that are definite are death and taxes. I’ve never seen taxes go down, and I have no hope whatsoever that insurance companies are going to start refunding premiums to people in New York. It’s a ruse. It’s not going to happen,” he said.