Washington, D.C. – Today, Protecting American Consumers Together (PACT) Executive Director Lauren Zelt published a guest essay in Newsday examining how rampant lawsuit abuse and insurance fraud have driven New York’s auto insurance costs to the highest levels in the nation — raising everyday costs for families, workers, and small businesses across the state.
Read the full piece here.
Key Excerpts:
New York has the highest auto insurance rates in the country. Full auto insurance coverage costs more than $4,000 annually, compared with $2,679 nationwide, according to Bankrate. The disparity for minimum coverage is even starker — New Yorkers pay more than twice the national average.
That burden doesn’t fall only on drivers. High insurance costs raise the price of a cab ride, food delivery, a plumber’s house call. Small businesses pay more to operate. Even New Yorkers who have never owned a car feel the impact in higher everyday costs.
Hochul is right that this didn’t happen by accident, noting in her State of the State address last week that these cost increases are “because of rampant fraud and runaway litigation costs.” It’s the predictable result of a legal system riddled with outdated rules, vague standards and incentives that reward abuse rather than accountability.
New York’s auto insurance laws have become a magnet for fraud and excess litigation. Fraudsters stage car crashes. Minor injuries are exaggerated into major lawsuits…
The scale of the problem is undeniable. In 2023 alone, insurers reported more than 38,000 suspected cases of auto insurance fraud to the state, a record. New York consistently ranks among the worst states in the nation for staged crashes. Fraud adds hundreds of dollars a year to the average policy.
New York has protected a broken status quo for too long. Gov. Hochul’s willingness to challenge and seek to end that lawsuit-driven system, even when it means breaking with long-standing political allies, reflects real leadership.
Auto insurance shouldn’t feel like a second rent payment. Cracking down on lawsuit abuse won’t solve every affordability challenge New Yorkers face, but it’s a necessary step toward restoring fairness, accountability and relief for families across the state.