30+ SMALL BUSINESSES BACK GOV. HOCHUL’S PLAN TO LOWER AUTO INSURANCE COSTS AND RETURN SAVINGS TO CONSUMERS
Mom-and-Pop Employers Call for Action As Rising Premiums Threaten Economic Growth
NEW YORK – A coalition of more than 30 small business owners, contractors, and service providers from across New York is urging the Legislature to support Governor Kathy Hochul’s plan to combat insurance fraud and return savings to consumers and small businesses struggling with skyrocketing auto insurance premiums.
In a letter to lawmakers, small businesses warned that rising auto insurance costs are threatening their ability to operate, hire workers, and serve their communities. The coalition represents a broad cross-section of New York’s economy – from local pizzerias, medical clinics, building material suppliers, laundromats, and neighborhood salons – located across New York City, including the Bronx, Queens, Brooklyn, and Manhattan, as well as on Long Island and in Central New York.
“For the small businesses that power this state, vehicles are the essential gears of our operations,” the business owners wrote. “Whether it’s a delivery van in Flushing, a contractor’s truck in Brooklyn, or a service vehicle serving customers in the Bronx, our economic growth is being crushed by a system that has spiraled out of control.”
Cited in the letter, auto insurance fraud in New York has surged by roughly 80 percent over the past five years, adding an estimated $300 in hidden costs to the average driver’s annual premium. New York drivers now pay an average of $4,000 annually for full auto coverage – nearly $1,600 more than the national average. For many small businesses, the burden is even greater. Owners say their insurance premiums have increased between 50 and 100 percent since 2021.
“For many of us, insurance has become the second-largest expense after payroll,” the businesses wrote. “We are being forced to choose between cutting staff or passing these costs on to families already struggling with inflation.”
The small businesses expressed strong support for Governor Hochul’s proposal to address the root causes of rising premiums – including insurance fraud and legal abuse – while ensuring that savings generated by reforms are returned directly to consumers and small businesses.
The full text of the letter is below:
Dear Governor Hochul, Majority Leader Stewart-Cousins and Speaker Heastie,
As a group of more than 30 small business owners, contractors, and transportation providers – representing the economic engine of New York from Buffalo to Long Island – we are writing to sound the alarm on a crisis that has become an existential threat. The skyrocketing cost of auto insurance is draining the lifeblood of our communities, and for our businesses, these premiums are quite simply too damn high.
For the small businesses that power this state, vehicles are the essential gears of our operations. Whether it is a delivery van in Jackson Heights, a contractor’s truck in Deer Park, or a service fleet in Rochester, our economic growth is being crushed by a system that has spiraled out of control.
The data paints a grim picture:
The “Fraud Tax”: Suspected motor vehicle insurance fraud in New York has surged by 80% over the last five years. Experts estimate this rampant abuse adds a $300 "hidden tax" to every single New Yorker’s premium.
A Widening Gap: New York drivers pay an average of $4,031 per year for full coverage – nearly $1,600 more than the national average.
The Breaking Point: Many of our businesses have seen commercial premiums surge by 50% to 100% since 2021. Insurance is now our largest fixed expense after payroll, forcing us to choose between cutting staff or passing these costs on to families already struggling with inflation.
We fully endorse the Governor’s plan to reduce unnecessary costs. It is a common-sense approach that targets the root causes – fraud, abuse, and legal loopholes – rather than just the symptoms. Specifically, we strongly support:
Empowering Law Enforcement and Prosecutors: Reinvigorating the State’s Insurance Fraud Prevention Board and giving new tools to provide District Attorneys and State Police with the resources and criminal penalties needed to dismantle the professional rings and organizers behind staged accidents.
Increasing Accountability: Extending the timeframe for insurers to investigate suspicious claims before being forced to pay, while simultaneously capping "jackpot" payouts for uninsured motorists, impaired drivers, or those committing a felony at the time of an accident.
Ensuring Savings Reach Us: Directing the DFS to enforce the Excess Profit Law as a "circuit breaker" to ensure that when these reforms lower costs, the savings are returned to small businesses and consumers, not kept as insurer profit.
Governor, you have often called small businesses the backbone of New York. Right now, that backbone is under severe strain from a system that rewards fraud while punishing hard work. We stand with you and respectfully urge the Legislature to act before more of us are driven off the road.