New York’s affordability crisis is squeezing small businesses from every direction. Rising rents, higher labor costs, supply chain disruptions, and inflation have already pushed many neighborhood companies to the brink. But one major cost driver has quietly become one of the most punishing: auto insurance.
New York drivers now pay some of the highest auto insurance rates in the nation, nearly double the national average. According to Bankrate, full coverage costs an average of $4,031 per year in New York, compared to $2,679 nationwide. Minimum coverage averages $1,729 annually – more than twice the national figure of $808. Premiums jumped another 13.5 percent in 2025, one of the largest increases in the country.
For New York City drivers, the burden is even heavier. In dense, working-class areas of Queens and Brooklyn, annual premiums often exceed $4,500 or even $5,000. For immigrant communities, where access to a car is frequently essential for earning a living, these costs are devastating.
The Flushing Chinese Business Association represents hundreds of immigrant-owned, family-run businesses in Queens. Many rely on vehicles every day – restaurants providing delivery, contractors traveling between job sites, and for-hire drivers working long hours. For these small business owners and workers, soaring insurance premiums aren’t just concerning; they’re unsustainable.
A key driver of these inflated rates is insurance fraud, particularly staged car crashes. Queens has seen widely reported cases involving organized crash rings that deliberately cause accidents to generate fraudulent claims. These schemes put innocent drivers at risk and flood the system with false payouts, forcing insurers to raise premiums across the board. Honest drivers and small businesses end up paying the price.
For independent contractors and small business owners, auto insurance has become a regressive tax – one that rises every year regardless of income. When premiums spike by double digits, owners are forced into impossible choices: cutting staff, reducing hours, raising prices, or closing their doors altogether. These impacts ripple through local economies.
That’s why Governor Kathy Hochul’s proposal to address the root causes of New York’s auto insurance crisis is so important. Her plan takes a comprehensive approach by strengthening fraud enforcement, cracking down on staged accidents, modernizing liability rules, and updating outdated legal frameworks.
There is also a clear equity dimension. Communities like Flushing—home to many immigrants and first-generation entrepreneurs—have been disproportionately harmed. Transportation is a gateway to opportunity. When it becomes unaffordable, economic mobility erodes.
Small businesses are the backbone of our neighborhoods. Giving them relief from one of their fastest-growing costs is essential to New York’s economic future. The time for action is now.
Peter Tu is a Senior Advisor at Flushing Chinese Business Association.
