The wheels turned during Gov. Kathy Hochul’s 2026 State of the State on Tuesday when she announced a slate of new proposals aimed at lowering car insurance rates in New York while putting the brakes on fraud.
The proposals included reviving a state fraud prevention board, giving insurance companies more leeway in reporting and alleging fraud, and limiting damages for drivers engaged in unlawful behavior — or those who are “mostly” at fault — in a collision.
Specific crimes that would warrant the capping of damages include uninsured motorists who have violated “state financial responsibility laws,” driving while impaired and anyone committing or fleeing a felony at the time of the collision.
“In many parts of our state, owning an automobile is not a luxury, it’s essential. Yet, New Yorkers pay the highest auto insurance rates in the nation, averaging $4,000 a year. $1,500 more than the national average,” the governor said. “Not because New Yorkers are doing anything wrong, but because rampant fraud and runaway litigation costs are jacking up prices.”
As part of the State of the State, Hochul also said she would “take on” medical providers who participate in fraud by signing off on phony medical diagnoses that result in “enormous payouts.” She also plans to reform the serious injury threshold by proposing standards on what constitutes a serious injury. It is unclear right now who would make that determination.
State agencies will also seek to take action when New York drivers illegally register their vehicles in other states, which artificially decreases their coverage and raises costs for law-abiding New York drivers, Hochul said.
“When the system allows out-of-control payouts,” the governor said. “Those costs get passed on to you in the form of higher monthly bills.”
Advocacy groups, companies and and politicians respond
The Citizens Budget Commission (CBC), a watchdog group over city and state finances and policies, said that lowering auto insurance costs would benefit many New Yorkers.
“Governor Hochul is right to hold the line on taxes to continue to bolster New York’s competitiveness,” Andrew Rein, CBC president, said in a statement. “Our future depends on residents and businesses coming, staying, paying taxes, and creating jobs here. This requires the State to focus its money and management on programs that deliver results.
Meanwhile, the governor also plans to legalize fully autonomous vehicles in New York. Waymo, a company that makes self-driving cars, applauded the effort.
“Governor Hochul’s proposal to legalize fully autonomous vehicles is a transformative moment for New York’s transportation system, Justin Kintz, head of global public policy at Waymo, said in a statement. “With the governor’s leadership, New York has the opportunity to pair its investments in slower speeds, better traffic enforcement, and first-in-the-nation congestion management strategies with Waymo’s demonstrably safe technology, creating a future where living in New York is safer, easier, and more accessible.”
Speaking of slower speeds, NYS Sen. Andrew Gounardes, representing Brooklyn, applauded Hochul for her “commitment to slowing down” vehicles on the road.
“I’m grateful for the governor’s commitment to slowing down reckless drivers and making our streets safer,” he said. “To truly tackle the traffic safety crisis, we need to make robust use of the tools available to us. That means passing my Stop Super Speeders Act to ensure real accountability for folks who refuse to drive responsibly.”
