Hochul Proposes Plan to Lower New York's High Auto Insurance Rates

Governor's plan targets fraud and lawsuit abuse to reduce costs for drivers

Published on Feb. 13, 2026

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New York Gov. Kathy Hochul has proposed a plan to crack down on auto insurance fraud and lawsuit abuse, which are driving up the state's high insurance rates. The plan aims to strengthen enforcement against fraud rings, tighten the 'serious injury' threshold for lawsuits, and limit non-economic damages for drivers who were primarily at fault or engaged in unlawful conduct during a crash. Hochul believes these changes will reduce fraudulent claims, shrink unnecessary lawsuits, and put sustained downward pressure on premiums for New York drivers.

Why it matters

New York has some of the highest auto insurance rates in the country, not because drivers are riskier, but because the state's system has allowed fraud and lawsuit abuse to flourish. This has resulted in higher costs being passed on to consumers. Hochul's plan targets the root causes of these issues in order to bring down insurance premiums for New Yorkers.

The details

Hochul's proposal would strengthen interagency enforcement to target fraud rings, rather than just individual drivers. It would also give insurers more time to investigate fraud before having to pay claims, reducing the 'pay first, investigate later' dynamic that has made copy-paste medical billing profitable. Additionally, the plan would tighten the 'serious injury' threshold for lawsuits and limit non-economic damages for drivers who were primarily at fault or engaged in unlawful conduct during a crash. These changes aim to reduce the profitability of marginal lawsuits that have sustained a high-volume litigation industry.

  • In 2023 alone, insurers reported more than 38,000 suspected auto insurance fraud incidents in New York to the state's Insurance Frauds Bureau, the highest total on record.

The players

Kathy Hochul

The Democratic governor of New York who has proposed a plan to crack down on auto insurance fraud and lawsuit abuse in the state.

Tim Capowski

A partner at Kahana Feld who represents insurance and corporate clients in litigation against trial attorneys in New York, and who provided the opinion piece on Hochul's proposal.

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What they’re saying

“When cases are cheap to file, hard to dismiss early, and expensive to defend, volume becomes the business model, and premiums keep rising.”

— Tim Capowski, Partner, Kahana Feld (bloomberglaw.com)

The takeaway

Hochul's plan to address auto insurance fraud and lawsuit abuse in New York has the potential to significantly lower the state's high insurance rates, which have been driven by these systemic issues rather than riskier drivers. By targeting the incentives and business models that have allowed fraud and excessive litigation to thrive, the governor's proposal aims to bring down costs for everyday New York drivers.