Hochul reaches deals on NYS insurance reform that could save 10% on bills

Gov. Kathy Hochul said car insurance reforms baked into the state budget deal could save New Yorkers 10% on their bills – but it could be a while before the relief comes.

New Yorkers pay on average more than $4,000 a year for car insurance, which is $1,500 more than the national average, according to the governor’s office.

“So I believe that this is going to put real money back in people’s pockets,” she said Wednesday at an event in the Big Apple as she took a victory lap after finalizing a budget deal with top lawmakers.

The Democratic leader cited a study by the Citizens Budget Commission that determined the legislation should cut down on insurance payments for drivers by 10% — a figure confirmed by the panel to The Post on Wednesday afternoon.

“That means if your bill is $2,000, it’s now going to be $200 less,” she said.

Hochul made changing the state’s car insurance laws a key sticking point in her lengthy negotiations with Democratic leaders in the legislature as they blew past an April 1 budget deadline.

The changes are meant to get a handle on fraudulent claims and eye-popping insurance payouts, Hochul said – though she didn’t clinch a proposed reform that would have largely helped the MTA and big businesses like FedEx against lawyers and their clients looking to target deep pocketed entities.

Hochul’s proposals were bitterly opposed by a lobby group for trial lawyers while the changes garnered support from the MTA, labor unions and ride share companies.

The package of reforms includes the following, according to the governor’s office:

• The serious injury threshold is more restrictive so damages for pain and suffering or emotional distress are for victims that can prove they suffered a serious injury.
• Damages are capped for people who are mostly at fault for causing a crash and want to sue their victims for large checks.
• Payouts are limited to $100,000 for people who were driving uninsured, drunk or while committing a felony even if you aren’t at fault.  
• Insurance companies can’t set rates based on personal factors like job, education level, homeownership status or zip code.
• Insurance companies will face more stringent oversight over the rates they set meant to stop excess profits.

The budget also includes language that would allow prosecutors to go after after people who organize staged crashes and not just the driver in the sham accidents, the governor’s office said.

“So my view is when our reforms kick in, hard-working New Yorkers will be the beneficiaries, they’ll have lower insurance bills, instead of the insurance executives taking home bigger profits,” Hochul said.

She has previously said it could take over a year or two for drivers to start to see the changes reflected on their bills.

Hochul dropped her fight to reform “joint and several liability,” which means several defendants can be individually on the hook for an entire payout regardless of how responsible they are for the accident – a status quo that could hurt the MTA.

The cash-strapped agency’s buses are often tied to crashes on city roads even if the bus drivers aren’t at fault, but the MTA is sued because of its deep pockets, MTA CEO Janno Lieber said in March, according to the New York Times.

Still, the MTA could benefit from the new cap on damages.

The New York State Trial Lawyers Association, which was against the reforms, said it was “deeply troubled” by the rollback of laws that “blames New Yorkers for injuries that would never have occurred but for the negligence of others.

“The path to affordability starts with regulating insurance companies that ‘delay, deny and defend’ as a business model, not running over consumer rights,” the NYSTLA said in a statement.

But Lawsuit Reform Alliance of New York Executive Director Tom Stebbins applauded the auto insurance restructuring.

“With support from a diverse coalition of unions, nonprofits, small businesses, and local governments — everyone except the trial lawyer lobby — Gov. Hochul is on the verge of winning a hard fought battle to disrupt a business model that rewards fraud and drives up the cost of everything,” he said in a statement.

“With fewer incentives to file unnecessary lawsuits and exaggerate claims, billboard lawyers will have fewer opportunities to get rich while the rest of us pay higher prices and inflated bills.”