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Gov. Hochul announced a proposal to reform New York’s auto insurance laws that she says could save the Metropolitan Transportation Authority nearly $50 million each year.
According to an MTA analysis released by the governor’s office, the proposed reforms could generate about $48 million in annual savings for the transit authority by reducing large settlement payouts related to crashes involving MTA buses.
State officials say the reforms aim to prevent what Hochul described as “jackpot settlements” in lawsuits where transit agencies are forced to pay large sums even when they are not primarily responsible for an accident.
Governor Hochul said,
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. 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.
The governor said the savings would be redirected toward improving subway, bus and rail service across the MTA system.
State officials say the proposal could also benefit transit agencies outside the MTA region.
More than 130 transit agencies across New York could collectively save up to $25 million annually under the proposed changes, according to the analysis.
Janno Lieber, chair and CEO of the MTA, said the reforms could reduce the agency’s exposure to large legal settlements, saying,
Governor Hochul’s common sense auto insurance reform will substantially reduce MTA’s exposure to windfall payouts for questionable lawsuits. Every dollar saved can be redirected back where it belongs: to delivering more frequent, more reliable transit service for New Yorkers.
The governor’s insurance reform plan includes several provisions intended to reduce fraudulent claims and limit liability payouts. Among them:
- Creating new legal penalties for people who organize staged car accidents
- Preventing uninsured drivers or those committing crimes from receiving large settlement payouts
- Ensuring people responsible for accidents cannot sue victims for compensation
- Narrowing the legal definition of “serious injury” for certain claims
- Requiring insurers to return excess profits to policyholders and justify rate increases
Officials say the changes are designed to reduce litigation costs and lower insurance premiums while freeing up transit funding.
Marie Therese Dominguez said the proposal would allow transit agencies to focus resources on serving riders rather than defending lawsuits.
The reforms are included in Hochul’s FY 2027 Executive Budget proposal and will be considered by the Legislature ahead of the state budget deadline on April 1.
The governor’s budget also includes continued investments in transit infrastructure, including funding for the MTA’s capital program and support for transit systems across the state.
State officials say those investments are intended to improve reliability, safety and accessibility for riders throughout New York.