Citizens for Affordable Rates Coalition Celebrates Breakthrough After Year-Long Advocacy Campaign
Our Bureau
Albany, NY
In a major win for working families across New York City’s immigrant and working-class neighborhoods, Governor Kathy Hochul today unveiled comprehensive auto insurance reforms during her 2026 State of the State address, designed to crack down on fraud and dramatically reduce the crushing insurance costs that are squeezing household budgets.
The announcement represents a significant victory for including consumer advocates, industry experts, and small business leaders led by the Citizens for Affordable Rates (CAR) coalition, which launched a public campaign last year to bring together community organizations and demand action on skyrocketing insurance premiums.
The Governor’s plan tackles the biggest cost drivers head-on by closing loopholes exploited by bad actors, strengthening fraud enforcement, updating outdated legal standards, and modernizing liability rules that have fueled higher car insurance premiums for years.
“For years, working families in the Bronx, Brooklyn, Queens, and immigrant neighborhoods across our city have paid some of the highest auto insurance rates in the country, while bad actors exploited the system to profit,” said José Bayona, a spokesperson for Citizens for Affordable Rates. “Governor Hochul’s budget takes decisive action against outdated rules and widespread fraud that have driven premiums to record levels. This package is a game-changer for the millions of families struggling amid the state’s affordability crisis.”
New York drivers currently pay an average of $336 per month for auto insurance—nearly $4,030 annually for full coverage, almost $1,500 above the national average. But in New York City’s working-class neighborhoods, the crisis is far more severe:
• In Brooklyn and the Bronx, families pay approximately $6,000 per year—more than double the national average
• For a Bronx family earning $60,000 annually, insurance costs consume more than 10% of their entire household income
• Small business owners—from bodega operators to livery drivers to delivery services—see these crushing costs passed directly to customers, driving up the cost of living for entire communities
• Even non-drivers feel the impact through higher cab fares, ride-share costs, and increased prices on everything from restaurant takeout to grocery deliveries
“These aren’t just statistics—these are our neighbors, our family members, our small business owners who are struggling,” Bayona added. “The mother of two in Sunset Park who needs her car to get to work. The father in Jackson Heights driving for a delivery service to support his family. The bodega owner in the South Bronx, whose insurance costs force him to raise prices. This is about economic survival.”
COMPREHENSIVE REFORMS TO COMBAT FRAUD AND LOWER RATES
Governor Hochul’s proposal targets the root causes of New York’s insurance crisis through an eight-point plan:
1. CRACKING DOWN ON ORGANIZED FRAUD RINGS
The State will reinvigorate the Motor Vehicle Theft and Insurance Fraud Prevention Board with dedicated resources from the Department of Financial Services (DFS), the Department of Motor Vehicles (DMV), the Division of Criminal Justice Services (DCJS), and the New York State Police (NYSP). In 2023 alone, New York saw 1,729 staged crashes—second highest in the nation—with insurance carriers reporting a record 38,270 suspected fraud cases. These scams add as much as $300 to every driver’s annual premium.
2. PROSECUTING FRAUD ORGANIZERS, NOT JUST DRIVERS
New legislation will empower prosecutors to seek criminal penalties against anyone organizing staged accidents—not just the individual behind the wheel—allowing district attorneys to dismantle entire criminal conspiracies driving up costs for honest drivers.
3. TARGETING CORRUPT MEDICAL PROVIDERS
The State will increase enforcement of medical licensure against providers who participate in fraud by signing off on phony diagnoses that result in enormous payouts, with temporary or permanent license revocation for those who commit these white-collar crimes.
4. STOPPING ILLEGAL OUT-OF-STATE REGISTRATIONS
State agencies will take action against New York drivers who illegally register vehicles in other states to artificially decrease their coverage—a practice that raises costs for law-abiding New York drivers.
5. STRENGTHENING INSURER ANTI-FRAUD PROGRAMS
The proposal extends the timeframe insurers have to investigate and report fraud beyond the current 30-day cap, while requiring insurers to pay policyholders two percent interest on any held-back payments as an incentive to move quickly on genuine claims.
6. LIMITING PAYOUTS FOR CRIMINAL BEHAVIOR
Drivers engaging in unlawful behavior at the time of an accident—including uninsured motorists, impaired drivers, and those committing or fleeing felonies—will face caps on non-economic damages, like as pain-and-suffering payouts, currently funded by law-abiding drivers’ premiums.
7. ACCOUNTABILITY FOR AT-FAULT DRIVERS
New York will join the majority of states in limiting non-economic damages for drivers deemed “mostly at fault” in causing an accident, introducing common-sense accountability into the compensation system.
8. TIGHTENING THE “SERIOUS INJURY” THRESHOLD
The proposal establishes objective medical standards for what constitutes a “serious injury” worthy of additional compensation beyond medical expenses and lost wages, preventing exploitation of vague definitions that allow minor, temporary injuries to generate astronomically high “jackpot” awards.
CONSUMER PROTECTIONS AND TRANSPARENCY
Governor Hochul’s plan includes critical safeguards ensuring savings reach working families:
• EXCESS PROFIT PROTECTION: DFS will re-examine the state’s Excess Profit Law to ensure any industry savings from these reforms are passed directly to policyholders, not retained as increased profits.
• RATE CHANGE TRANSPARENCY: Insurance companies will be required to notify policyholders about rate changes, explain why changes are happening, and provide additional context upon written request—ending the current practice of unexplained premium increases.
• SAFE DRIVER INCENTIVES: Insurers must offer discounts to drivers who opt into technology-based safe driving programs using devices, cameras, or smartphone apps to monitor behavior, with strict privacy protections and consumer education requirements.
WHAT’S NEXT: PATH TO PASSAGE
The comprehensive reform package will be considered during the state budget session in April 2026. The Citizens for Affordable Rates coalition plans continued advocacy throughout the legislative session to ensure passage and will mobilize community support for the reforms.
If enacted, New York drivers could see rate reductions beginning later this year, with the full impact of fraud reduction and system reforms materializing over time as criminal prosecutions proceed and new standards take effect.
“Governor Kathy Hochul has shown real leadership in tackling this crisis,” said Bayona. “Now it’s up to the legislature to stand with working families and pass these reforms. The families in our communities cannot afford to wait any longer.”
“Auto insurance premiums affect nearly every sector of our local economy. From the small delivery business to the everyday commuter, these excessive costs drag down growth. Governor Hochul is absolutely right to address the root causes of this crisis and take decisive action to lower out-of-control costs,” said former NYC Taxi & Limousine Commissioner Matthew W. Daus.
“At a time when operating costs are rising across the board, auto insurance has become a real barrier for working people and immigrant-owned small businesses. Governor Hochul’s proposal recognizes the urgency of this issue. Meaningful car insurance reform would help families stay employed, entrepreneurs keep their businesses running, and communities remain economically stable,” said Joel Feliciano, Chief Operating Officer of the Yemeni American Merchants Association.
“The math simply doesn’t add up for New York drivers anymore: we pay nearly twice the national average for the same basic coverage. We welcome Governor Hochul’s commitment to delivering much-needed reforms. This action signals that the days of unchecked, sky-high premiums are coming to an end,” said Eduardo Giraldo, President of the Queens Hispanic Chamber of Commerce.
“Meaningful reform requires standing up to the forces that profit from high insurance costs. Governor Hochul is doing exactly that,” said Zach Miller, Vice President of Government Affairs at the Trucking Association of New York (TANY). “Her proposal is critical to restoring balance to our insurance market and delivering much-needed relief to the small and mid-sized businesses that keep New York’s economy moving.”
“Communities of color in Western New York have been hit hard by sky-high auto insurance rates for years, paying far more than the national average for the same coverage. Governor Hochul’s proposal takes on the special interests that have profited from this broken system and delivers real relief to working families. This is bold action toward fairness, equity, and making transportation affordable for everyone in our communities,” said Rev. James A. Lewis, President, Buffalo-Niagara NAN.
“It is easy to overlook the complexity of cost drivers causing personal auto insurance premiums to increase faster than overall inflation. Governor Hochul is proposing comprehensive solutions for lasting structural relief – in particular, proposals to enhance fraud enforcement, modernize litigation rules, and enact serious injury and comparative negligence reforms. Her willingness to take a holistic approach is a win-win for both insurance carriers and personal auto policyholders, and offers a clear path towards increasing personal auto insurance affordability and availability,” said Michel Léonard, PhD, CBE Chief Economist and Data Scientist at the Insurance Information Institute.
“Governor Hochul is taking on one of the most stubborn and unfair cost drivers facing New Yorkers: auto insurance. For for-hire vehicle drivers, who work as independent contractors and must pay their own auto liability coverage, these costs hit especially hard. Cracking down on fraud and abuse will help bring down premiums for drivers who play by the rules, and that relief will flow directly to passengers through lower fares for black car, Uber, and Lyft trips. These reforms also reinforce the broader fight against fraud across the transportation system, which supports our work at the Black Car Fund to protect honest drivers and ensure the workers’ compensation system works as intended. We applaud the Governor for tackling this problem head-on,” said Ira Goldstein, Executive Director of The Black Car Fund.
“As a member of the governor’s auto insurance task force, I applaud Governor Hochul for laying out a plan to tackle the root causes of skyrocketing auto insurance rates. By addressing systemic fraud, updating legal standards, and prioritizing accountability, this plan establishes a practical, consumer-focused framework for achieving much-needed relief for drivers throughout the state. We look forward to continuing to work with the administration and other stakeholders to ensure these reforms lead to meaningful and lasting cost savings for New Yorkers and our drivers,” said Cira Angeles, Livery Base Owners
“Every dollar New Yorkers overpay for car insurance is a dollar taken away from groceries, rent, or education,” said John Park, a member of Queens Community Board 7 and a small business owner. “We’re grateful Governor Hochul is finally confronting this broken system head on. Her leadership is exactly what families have been waiting for to get their household budgets back under control.”
“For too long, New Yorkers, especially Black people and people of color, have been squeezed by auto insurance rates that are double the national average. Governor Hochul’s proposal confronts the special interests profiting from a broken system and is a critical step toward lowering premiums and delivering real relief for working families across New York,” said Tuulikki Robertson, Executive Director, The Black Institute.
“Governor Hochul deserves credit for taking on the special interests that have inflated New York’s insurance costs for too long,” said Dan Rodriguez, Vice President of Public Affairs at Coach USA. “By prioritizing real reform over the status quo, she is making it clear that affordability must come first. This proposal is a massive step toward fixing a system that has been broken for years.”
“New York’s working families, especially those in Black and underserved communities, have been trapped in an auto insurance system that puts special-interest profits ahead of people,” said Terri Arnold-McKenzie, Chief Operations Officer, Urban League of Long Island. “With premiums soaring to nearly double the national average, families are being forced to choose between transportation, food, housing, and basic necessities. Governor Hochul’s proposal represents a critical lifeline and a meaningful step toward fairness. It directly acknowledges the affordability crisis crushing our neighborhoods and signals that relief for hardworking New Yorkers can no longer wait.”
“High auto insurance rates have been a hidden tax on our community for decades,” said Hyun T. Lee, President of the Korean American Association of Queens and a small business owner. “We applaud Governor Hochul for recognizing this injustice and stepping in with a plan to bring premiums down. This is a long-overdue victory for fairness and affordability.”
“When essential costs like insurance spiral out of control, our small businesses and local merchants feel the sting first. Governor Hochul’s proposal is a smart, pro-affordability move that benefits drivers and the local economies they support. It is exactly the kind of economic relief New Yorkers need right now,” said Jairo Guzman of the Mexican Coalition for the Empowerment of Youth and Families.
“Our neighbors across the state are being crushed under an affordability crisis that grows heavier by the day — from food to rent to childcare and now auto insurance. Governor Hochul’s plan recognizes that working families cannot absorb another unchecked cost. We commend her for taking action to reform a broken insurance system that has put profits over people for far too long. Real relief requires leadership — and this proposal is an important step toward putting hard working New Yorkers first,” said Kevin Livingston, Executive Director, 100 Suits.
“As a small business owner in Nassau County, I see firsthand how rising insurance costs are suffocating our local economy. Governor Hochul’s proposal moves beyond political talk and delivers real action to rein in these costs for drivers, passengers, small business owners and employees. We need this kind of leadership to survive and continue serving our communities,” said Sagine Pierre Chalres, Small Business Owner, Sage & Angie.
Together, coalition members emphasized that Governor Hochul’s budget proposals reflect a shared commitment to finally containing skyrocketing auto insurance costs and putting New York families, workers, and small businesses first.
About Citizens for Affordable Rates (CAR)
Citizens for Affordable Rates (CAR) is a coalition of citizens, advocates, and organizations dedicated to tackling the root causes of high costs in New York. Through advocacy, education, and policy reform, CAR is committed to building an affordable and dependable system for all New Yorkers. For more information, visit: www.citizensforaffordablerates.com
