Hochul pledged to save NYers a bundle of money on car insurance, but plan already facing pushback

Gov. Kathy Hochul pledged to save drivers a bundle of money on car insurance by switching state laws on personal injury lawsuits – but high-powered attorneys want to ensure that never happens.

Hochul said she will push reforms that would put the brakes on soaring auto insurance premiums as New Yorkers pay an average of $4,000 per year — a whopping $1,500 more than the national average.

But her pitch to change the state’s nebulous “serious injury” threshold to weed out minor lawsuits has already riled the NYS Trial Lawyers Association, a high-octane lobby whose members donate big bucks to Democratic legislators.

“Weakening victim protections lets Big Insurance off the hook while working families pay more,” the association said in a statement. The group has already released a video showing the Democratic governor side-by-side with Florida Republican Ron DeSantis both blasting lawsuit payouts.

“The idea that auto insurance companies will suddenly ‘do the right thing’ and lower rates is laughable,” the group added. “New Yorkers are too smart to buy it. These are the same insurers that jack up our premiums year after year, post record profits—and get regulators to sign off on it.”

New York’s legal definition of what constitutes a “serious injury” is vague can include smaller injuries that sideline someone involved in an accident for a short time. Hochul wants to change the threshold and propose “objective and fair medical standards” for what qualifies as serious injury.

Because of the lack of a concrete definition, she said individuals have tried to “game the system” to win high “jackpot” awards in court. The state observes a “comparative negligence” approach to accident liability — meaning even a driver mostly at fault for an accident can make claims for a percent of their damages, including non-economic damages.

Hochul said in her annual State of the State address on Tuesday that she’d target high premiums with a crackdown on staged accidents, saying insurance companies are “jacking up prices” due to fraud and “runaway litigation costs.”

“Let’s be clear about how that happens,” Hochul said. “When the system allows out-of-control payouts those costs get passed on to you in the form of higher monthly bills.

“New Yorkers should not pay more for the same coverage and this is the year, we’re going to do something about it,” she added. “We’re putting the brakes on fraud and ending a system that rewards illegal behavior. If you were driving drunk, driving without a license, or committing a felony at the time of a crash, you should not get a payday.”

The association said it supports “reasonable measures” to stop fraud and rein in the “delay-and-denial” business model insurers rely on.

“What we don’t support are changes to liability standards that would further clog the courts, drag out cases, and give Big Insurance and ride-hailing giants a free ride. No New Yorker seriously believes that will make insurance cheaper,” the group said.

Part of Hochul’s reform plans includes putting a cap on non-economic damages for drivers engaging in criminal behavior at the time of an incident. That would bar uninsured motorists who have violated state financial responsibility laws, individuals convicted of driving while impaired, and those committing a felony or fleeing the scene.

In addition, she’s proposing legislation to ensure prosecutors can seek criminal penalties against any individual responsible for organizing a staged accident, not just the person behind the wheel.

The Lawsuit Reform Alliance applauded the governor for tackling fraud and personal injury awards that jack up premiums.

“By tackling rampant fraud and reining in the perverse incentives built into New York’s existing laws, her proposals will help make insurance more affordable and our roads safer,” said LRA executive director Tom Stebbins. “They’ll also ensure the sophisticated actors who orchestrate these schemes are brought to justice and not merely the vulnerable people drawn into them.”

He said sophisticated fraud rings recruit immigrants and those facing homelessness as the drivers that cause staged crashes, and unnecessary medical procedures and surgeries meant to increase the value of the claim follow.