Washington, D.C. – Today, two new op-eds highlight New York’s landmark auto insurance reform legislation signed by Gov. Kathy Hochul — praising her willingness to take on the trial bar on behalf of everyday drivers. In The Center Square, PACT Executive Director Lauren Zelt writes that the reforms are “rooted in a simple idea: honest consumers should not be forced to subsidize bad actors” — and that New York is “finally beginning to move in the right direction.”
Also today, PACT Board Member and Kahana Feld Partner Tim Capowski published an op-ed in The Buffalo News, examining how New York built itself into the nation’s most hospitable environment for insurance fraud — and why Hochul’s decision to dismantle that system represents a rare act of political courage.
Buffalo News Excerpts:
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In signing landmark insurance reform legislation as part of New York’s budget, Hochul demonstrated something increasingly rare in American politics: the willingness to fight a powerful, well-funded special interest (the trial bar) on behalf of ordinary people who simply want to afford a car.
For years, New York has operated as the nation’s most hospitable environment for insurance fraud — not because New Yorkers are dishonest, but because the legal and regulatory framework essentially invited bad actors to loot the system. New York has nearly 2,000 staged car crashes per year — the second-highest rate in the nation. These are scripted, orchestrated collisions designed to funnel “victims” to pre-arranged clinics that bill insurers for unnecessary MRIs, procedures, and evaluations — up to the full $50,000 no-fault limit per person.
The fraud isn’t opportunistic. It is industrial. And every law-abiding New Yorker whose insurance bill has climbed year after year is subsidizing it.
New York’s lawsuit regime compounds the problem. Until now, the legal definition of “serious injury” was vague enough that claimants with minor, temporary conditions could sue for pain and suffering — and the trial bar defended every loophole ferociously.
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Will these reforms actually lower rates? Yes. After Florida enacted sweeping reforms in 2022-2023, nearly 80% of the state’s auto policyholders are seeing lower rates in 2026. State Farm returned $533 million to Florida drivers. Progressive refunded over $1 billion.
For a Democratic governor to push through structural no-fault reform, over the vigorous objection of the trial bar, is an act of political courage that transcends ideology.
Center Square Excerpts:
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The reforms are rooted in a simple idea: honest consumers should not be forced to subsidize bad actors.
Why are premiums so high? Because New York’s legal and regulatory framework has allowed fraud and abuse to flourish for far too long.
Staged crashes, inflated medical claims, organized fraud rings and jackpot-style litigation have created a system where the costs are ultimately passed on to everyday drivers. Hochul herself has pointed to staged accident fraud as a major factor driving premium increases statewide.
The budget reforms begin addressing that reality.
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Legitimately injured New Yorkers will still retain the ability to recover damages. What these reforms target are fraudulent claims, inflated payouts and legal abuses that increase costs for everyone else. Protecting consumers and combating fraud are not mutually exclusive goals — in fact, they go hand in hand.
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The lesson is straightforward: when states crack down on fraud and lawsuit abuse, consumers benefit.
That is why this moment matters.
For too long, Albany avoided confronting the role that organized fraud and excessive litigation play in driving up costs for working families. Political pressure from powerful special interests often stood in the way of commonsense reforms. In fact, debate over these proposals became one of the major sticking points delaying this year’s state budget negotiations.
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New Yorkers deserve an insurance market that rewards safe drivers — not fraudsters, staged crash rings and excessive litigation. Albany is finally beginning to move in that direction.