{"id":223537,"date":"2026-05-07T17:30:16","date_gmt":"2026-05-07T17:30:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/223537\/"},"modified":"2026-05-07T17:30:16","modified_gmt":"2026-05-07T17:30:16","slug":"new-york-state-reaches-budget-deal-that-includes-several-auto-insurance-reforms","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/223537\/","title":{"rendered":"New York State Reaches Budget Deal That Includes Several Auto Insurance Reforms"},"content":{"rendered":"

New York State has a 2026-2027 budget agreement. The budget totals about $268 million and includes some but not all of Gov. Kathy Hochul\u2019s proposals for auto insurance reform to lower premiums along with some lawmakers\u2019 proposals for consumer protections.<\/p>\n

The budget was supposed to be ready by April 1. But state lawmakers passed nine deadline extensions to keep the government functioning until they and the governor could come to an agreement.<\/p>\n

According to Hochul\u2019s summary, the budget does not raise income or statewide business taxes and it maintains the governor\u2019s powers to make future adjustments if actions by the federal government require.<\/p>\n

It does, however, include a surcharge on high value second homes and investor-owned apartments worth $5 million and up in New York City, which lawmakers estimate will generate at least $500 million in tax revenue annually.<\/p>\n

\u201cI promised a budget that works for working people and expands opportunities for all New Yorkers and I was not going to back down from that fight,\u201d Hochul declared in announcing the agreement.<\/p>\n

One group that had pressed for Hochul\u2019s insurance reforms, Citizens for Affordable Rates (CAR), called the agreement \u201ca big win for New Yorkers struggling to get by in the midst of an affordability crisis.\u201d<\/p>\n

\"\"New York Gov. Kathy Hochul<\/p>\n

The insurance industry supported Hochul\u2019s efforts but the final agreement includes some provisions including prior approval of rate hikes and limits on certain rating criteria that the industry may not welcome.<\/p>\n

The legislative houses are now tasked with passing bills to enact the priorities set forth in the budget.<\/p>\n

In addition to auto insurance, the budget seeks to lower costs for childcare, utilities, and tuition for community and some four-year college programs. It provides $30 million in direct \u201ctariff relief\u201d for New York farmers and eliminates the state\u2019s income tax on tipped wages up to $25,000 per year. It outlines investments in affordable housing, infrastructure, public safety, child nutrition, water quality and the environment, and it calls for online platform protections for children and countermeasures to aggressive federal immigration enforcement.<\/p>\n

Regarding auto insurance, the budget adopts reform provisions as proposed by Hochul that address:<\/p>\n

Fraud Fighting: Crack down on staged accidents, including increased legal liability for the ringleaders and giving insurers more time to investigate claims.
\nLimit on Damages for \u201cMostly\u201d At-Fault Drivers: Limit payouts to those found to be more than 50% responsible for an accident.
\nTighter \u201d Threshold: Narrow the definition of \u201cserious injury\u201d allowed for non-economic damages (pain and suffering), reducing the ability to sue for minor injuries.
\nTech Discounts: Require insurers to offer discounts to drivers opting into programs like telematics or other apps that monitor driving behavior.<\/p>\n

The budget also reflects other Hochul proposals that were amended by lawmakers and other proposals initiated by lawmakers:<\/p>\n

Prior Approval for Rates: Lawmakers insisted that insurers be required to get prior state approval before implementing rate hikes.
\nTighter Profit Limits: Rules to prevent insurance companies from taking excess profits.
\nRating Criteria Prohibitions: Insurers will be prevented from using zip codes and credit scores to rate policies.
\nEliminate 90-Day Rule: Eliminates the category of \u201cserious injury\u201d that allowed lawsuits based solely on being unable to perform daily activities for 90 days.<\/p>\n

A related proposal that was not part of Hochul\u2019s proposals will require dangerous drivers in New York City who receive 16 or more speed camera violations in a year to install intelligent speed limiter devices on their vehicles.<\/p>\n

Opposition by the state\u2019s trial lawyers to the auto insurance reforms was a major obstacle to a budget agreement, with some lawmakers arguing they did not belong in a budget but should be handled separately.<\/p>\n

Trial lawyers questioned the promise of lower costs for drivers. They argued that the overall changes disadvantage crash victims to benefit insurance companies and firms like Uber. They have argued that capping damages and limiting liability will not really lower rates but will mean injured people receive less compensation.<\/p>\n

\u201cInsurance profits must not come at the expense of justice, accountability, or the rights of injured New Yorkers,\u201d Andrew Finkelstein, president of the New York State Trial Lawyers Association, told lawmakers.<\/p>\n

In the end, the lawmakers went along with Hochul\u2019s auto insurance measures while adding their own.<\/p>\n

\u201cBy strengthening enforcement and modernizing outdated rules, they are helping put money back in people\u2019s pockets. These reforms will bring real relief for working families, and mark a meaningful step toward making New York more affordable,\u201d commented James Freedland, spokesperson for the Uber-backed CAR.<\/p>\n

Hochul campaigned relentlessly for her reforms. For her the key question had become: why do New Yorkers pay so much?<\/p>\n

\u201cNot because New Yorkers are doing anything wrong, but because rampant fraud and runaway litigation costs are jacking up prices,\u201d was Hochul\u2019s answer.<\/p>\n

The Democratic governor insisted New Yorkers \u201cshould not pay more for the same coverage\u201d and vowed this is the year, the state does \u201csomething about it.\u201d<\/p>\n

Hochul and others argued that car insurance rates are being driven up by fraud, litigation, legal loopholes, and enforcement gaps, with staged crashes and associated insurance fraud inflating everyone\u2019s premiums.<\/p>\n

Small businesses, big businesses, rideshare companies, police and fire unions, insurers, insurance agents, truckers, bus companies, auto repair shops, university professors, district attorneys, mayors, immigrant and minority groups and others have come out in support of her efforts to lower costs for drivers by fighting fraud and discouraging excess litigation and excess insurer profits.<\/p>\n

According to a statewide survey<\/a> of voters commissioned by the Uber-backed group CAR, three-quarters (75%) of New Yorkers contend that auto insurance costs are a financial burden on their household and even more (86%) support Hochul\u2019s legislation.<\/p>\n

During the legislative debates, Assembly Member Landon C. Dais suggested the stakes for getting the reforms right are high and the issues deserved a full airing.<\/p>\n

\u201cI would argue that we as a legislature are probably on trial right now along with the insurance industry and the trial lawyers. The people of New York are the jury and they\u2019re looking for us to for a verdict of affordability while the parties point fingers,\u201d offered Dais.<\/p>\n

He suggested that insurers, lawyers and lawmakers share responsibility for high costs and \u201cno party is entitled to summary judgment in the court of public opinion.\u201d<\/p>\n

\n Topics
\n Auto<\/a>
\n New York<\/a>\n <\/p>\n","protected":false},"excerpt":{"rendered":"New York State has a 2026-2027 budget agreement. The budget totals about $268 million and includes some but…\n","protected":false},"author":2,"featured_media":223538,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[87821,9,45829,11,10,49,43742,51,50],"class_list":["post-223537","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-hochul-auto-insurance","tag-new-york","tag-new-york-auto-insurance","tag-new-york-headlines","tag-new-york-news","tag-new-york-state","tag-new-york-state-budget","tag-new-york-state-headlines","tag-new-york-state-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/223537","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=223537"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/223537\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/223538"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=223537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=223537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=223537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}