ROCHESTER, N.Y. — In 2026, there aren’t many things we pay for that go down in price. But that is about to change for New Yorkers who, in many cases, shell out thousands of dollars a year for auto insurance.
Fraud, liability claims and transparency regarding how insurers set your rates — those are just some of the changes that are part of the recently passed state budget.
In the state of New York, it’s a title no consumer wants to hear.
“New York state has some of the highest auto insurance rates in the country,” said Mike Zwas, president of The Insurance Marketplace, an independent, locally-owned insurance agency which works with several insurers to find the best fit for customers. He says some reasons behind the state’s high car insurance are global, but says many are specific to New York policy.
“In New York, one of our key drivers is fraud and litigation issues, frivolous litigation, lawsuit abuse,” said Zwas. “And those are unique to New York state. We’re an outlier compared to most other states in the country.”
New Yorkers pay 32% more than the national average for auto insurance. The average premium is close to $1,900 a year, according to the nonprofit watchdog group, The Citizens Budget Commission. The state budget addresses that, with measures CBC says will shrink those rates by about 10%.
“We were able to incorporate some aspects of a bill that I sponsor to deal with consumer protections,” said Assemblymember Jen Lunsford, a Democrat representing the 135th district, in the Rochester area. “And I think that that will ultimately deliver real savings.”
Lunsford is also a lawyer with extensive personal injury tort experience. The changes would limit payouts for those who cause crashes, and crack down on payouts for staged crashes and other fraudulent claims.
“Fraud was one of the things I think everybody agreed about,” Lunsford said. “No one thinks we should all be paying for fraud.”
The new law puts a cap on insurance company profits at 5%. It also lifts the veil on how auto insurers set rates for customers — prohibiting consideration of things like a person’s zip code, job status or whether they own a home.
“One of the things that we do require is that if an insurance company is going to change your rate, that they have to tell you why,” said Lunsford. “And I think that a lot of times, people are given rates based not on their driving record, but on whether they’re the kind of person an insurance company thinks will file a claim. And I don’t think people realize how much of a factor that is.”
“I think one of the big misconceptions is that part of the problem is the greedy insurance companies,” said Zwas. “And what people don’t understand is that New York has been so difficult for insurance companies to work in, especially in the auto line of insurance is the insurance companies have been leaving New York state.”
Zwas says more competition between more insurers is better for consumers. He credits Gov. Kathy Hochul for tackling the issue of high insurance rates. He believes lower rates won’t happen overnight — but it’s a start.
“It’s going to take a little bit of time,” he said. “But at least we’re addressing the root causes of the issues.”