New York Governor rolls-out auto insurance reform plan
New York Governor Kathy Hochul recently announced an auto insurance reform plan that will tackle fraud but also will require insurance companies to pay back policyholders after making excess profits.
Hochul claims that her plan will lower the cost of auto insurance and deliver $48 million of savings annually for the Metropolitan Transportation Authority (MTA).
The plan includes changing laws that force New Yorkers to pay for crashes that isn’t their fault, this includes preventing MTA from being forced to pay “jackpot” settlements for crashes, in which, their buses were not primarily to blame.
“New York’s broken insurance system is not just hurting those who rely on a car to get around, but the millions of New Yorkers who take trains and buses every day,” Hochul said in a release. “For too long, our transit agencies have been used as a deep pocket for jackpot settlements, forced to make huge payouts even when their buses aren’t at fault for a collision. If our common sense reforms get passed in this year’s budget, we will produce tens of millions of dollars in annual savings, all of which can go right back to running the better, more frequent transit service that every New Yorker deserves.”
While not a focus of the plan, the release says it will force insurers to justify every rate increase directly to consumers and state regulators.
It also will create a threshold for insurance profits, it says. Those profits would be sent back to policyholders if insurance surpass the threshold.
Florida has statutes that require auto insurers to report excessive profits and it outlines formulas that insurance companies should use to determine their underwriting profits.
Progressive announced in October that it will refund nearly $1 billion to Florida auto policyholders due to improved market conditions.
Gov. Ron DeSantis’s office said at that time that it was aware of multiple insurance companies approaching the statutory threshold.
New York’s plan also would require insurers to offer mandatory technology discounts that incentivize safe driving.
The plan also would create new legal liability for criminals orchestrating staged accidents and supporting police and prosecutors in building cases, the release says.
It would prevent people committing crimes or driving uninsured from landing jackpot payments beyond routine reimbursement for medical care or lost wages.
According to the release, the plan also will better define what constitutes a serious injury.
The insurance reforms will be included in the 2027 executive budget and will be considered by the legislature as part of the budget process ahead of the April 1 deadline, the release says.
Image
Governor Kathy Hochul and the Metropolitan Transportation Authority (MTA) officials announce auto insurance reform plan/New York Governor’s Office.