NYC Drivers Could Pay Less For Insurance Under Deal

NEW YORK, NY— New York legislative leaders reached a broad agreement on car insurance reforms that would narrow some crash victims’ ability to recover damages while placing new limits on how insurers raise premiums, according to top lawmakers involved in budget negotiations.

Senate Majority Leader Andrea Stewart-Cousins said the agreement largely preserves Gov. Kathy Hochul’s original proposal, though lawmakers rejected one of the administration’s most contentious changes to liability law.

“There will be opportunities for a whole readjustment, and we are hoping that there indeed will be benefits and rebates for those of us who are paying way too much for car insurance,” Stewart-Cousins told reporters Tuesday.

The deal would block Hochul’s proposal to eliminate compensation claims for drivers found more than 51 percent responsible for a crash. Current law allows injured parties to recover damages even when another liable party cannot pay its share, a legal standard known as joint and several liability.

Hochul had argued the system forced public agencies such as the Metropolitan Transportation Authority to absorb large payouts even when their share of fault was minor. MTA Chair and CEO Janno Lieber publicly backed the proposal during budget negotiations.

But another major piece of Hochul’s insurance agenda remains in the agreement: narrowing the state’s definition of “serious injury,” which determines when crash victims can sue for pain and suffering beyond the $50,000 covered under no-fault insurance.

Current law includes injuries that prevent someone from performing daily activities or working for at least 90 days. Under the proposed changes, that category would be removed.

Trial lawyers and injury advocates said the change could sharply limit claims involving traumatic brain injuries and soft-tissue injuries that do not fit other statutory definitions, such as fractures or permanent organ damage.

Stewart-Cousins said lawmakers also agreed to restrict some of the data insurers use to set rates, including ZIP codes and credit scores. Insurers also would lose the ability to automatically impose annual 5% increases without additional justification to the state Department of Financial Services.

The agency approved premium increases as high as 21 percent in 2024.

Hochul has said the broader insurance package could reduce premiums by about $25 per month for drivers. The governor also repeatedly pointed to insurance fraud as a factor behind rising costs, though Department of Financial Services data reviewed during negotiations showed fewer fraud cases than administration officials had cited publicly.

Budget talks accelerated as lawmakers reported progress on several unresolved policy issues, including climate policy, housing development rules and immigration measures.

Assembly Ways and Means Chair J. Gary Pretlow said negotiators had reached “a general agreement” on the major sticking points, though legislative language had not yet been finalized.

“We’re close but there is no language written,” Pretlow said when asked about negotiations over housing development changes tied to the State Environmental Quality Review Act, known as SEQRA.

He gave the same assessment for auto insurance, immigration policy and climate proposals.

Lawmakers approved another short-term budget extender authorizing state spending through Wednesday as negotiations continued.

Legislative leaders also finalized “table targets,” discretionary funding pools divided among budget subcommittees after both chambers passed their one-house budget proposals.

The allocations include $120 million for human services and labor, $85 million for education, $45 million for health and $30 million for public protection. Transportation received $5 million.