UNIVERSITY TRANSPORTATION RESEARCH CENTER RELEASES ANALYSIS HIGHLIGHTING URGENT NEED FOR AUTO INSURANCE REFORM IN NEW YORK
Transit Experts: Governor Hochul’s Reforms Could Lead to Big Savings for Consumers
NEW YORK – Detailing research that highlights the structural drivers of rising auto insurance costs, the University Transportation Research Center (UTRC) at the City University of New York today released a letter to New York State legislative leaders calling for targeted reforms to improve affordability and return savings to consumers across the state.
Addressed to Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl E. Heastie, UTRC’s letter presents data-driven research identifying the root causes of rising insurance costs and outlining reforms that could help lower premiums for New Yorkers.
“New York drivers, small businesses, and transportation providers are facing rapidly rising insurance costs – nearly double the national average – driven by structural issues that extend beyond market fluctuations,” the organization states. “Without targeted reforms, these costs will continue to increase, placing further strain on consumers and key sectors of the state’s economy.”
UTRC identifies several key structural drivers of rising premiums, including “systemic fraud and staged accidents, exaggerated and inflated claims, [and] litigation dynamics,” which contribute to higher costs across the system. UTRC estimates that these factors function as a “hidden fraud tax” of approximately $200 per policy, directly increasing costs for drivers and consumers.
New York drivers pay some of the highest auto insurance rates in the nation – nearly double the national average. Bankrate estimates full coverage costs $4,031 annually in New York compared to $2,679 nationwide, while minimum coverage averages $1,729 versus $808 nationally. Compounding the burden, drivers faced a 13.5 percent premium increase in 2025, the fourth-highest in the country.
Transit experts emphasize that targeted policy changes can reduce these pressures and return savings to policyholders. UTRC outlines specific reforms, including enhanced fraud detection, improved data sharing between insurers and regulators, stronger oversight of claims and billing practices, and the adoption of modern underwriting tools such as telematics and usage-based insurance.
The research also highlights how strengthening the State’s Excess Profit Laws could help ensure that cost savings are passed back to consumers. Citing recent data from Florida, UTRC notes that the state’s largest insurers are delivering an average 8 percent rate decrease for 2026, with nearly 80 percent of policyholders expected to see lower premiums. It also references nearly $1 billion in refunds returned to consumers, underscoring how policy and market changes can produce direct financial benefits for drivers.
The analysis also examines the role of fraud and billing practices, identifying staged collisions, no-fault billing abuse, and medically unnecessary treatment as significant contributors to rising loss costs. UTRC suggests that targeted enforcement in these areas could meaningfully reduce premiums.
“In light of these findings, we respectfully urge the Legislature to prioritize targeted, data-driven reforms to address fraud, improve accountability, and modernize insurance practices,” the letter concludes, noting that such measures can help “return cost savings to policyholders” and create a more stable and affordable insurance market for New Yorkers.
The full text of the letter can be found here:
Re: Research Reports Relevant to NY State Insurance Reform & Affordability Crisis
Dear Majority Leader Stewart-Cousins and Speaker Heastie:
We write today on behalf of the University Transportation Research Center (UTRC), of the City University of New York (CUNY) at The City College of New York, to share recent, data-driven research that may be useful as the Legislature considers issues related to solving New York’s escalating auto insurance affordability crisis.
New York drivers, small businesses, and transportation providers are facing rapidly rising insurance costs – nearly double the national average – driven by structural issues that extend beyond market fluctuations. Our research indicates that without targeted reforms, these costs will continue to increase, placing further strain on consumers and key sectors of the state’s economy.
UTRC is a university-based transportation research center housed at The City College of New York. Historically, UTRC has operated as part of the U.S. Department of Transportation’s University Transportation Center program, which supports applied research and workforce development on critical transportation policy issues. Our research center primarily conducts research in U.S. Department of Transportation (U.S. DOT Region 2 – New York, New Jersey, Puerto Rico & the Virgin Islands). Our mission is to conduct independent, data-driven research on critical transportation policy issues to inform transportation policy in New York and beyond.
As part of that work, our center has conducted in-depth analyses of rising commercial auto insurance costs, particularly as it impacts the taxi, for-hire vehicle (FHV), and limousine industries. These relevant reports, entitled NYC Taxi & For-Hire Vehicle Insurance Crisis: Root Causes and Solutions and Curbing the Limousine Insurance Crisis: Hire Vehicle Insurance Reform, identify several key structural drivers of cost increases, including:
Systemic fraud and staged accidents
Exaggerated and inflated claims
Litigation dynamics that increase claim severity
Regulatory inefficiencies and market constraints
Notably, these factors operate as a “hidden fraud tax” estimated at approximately $200 per policy on drivers and consumers, contributing directly to higher premiums across the state. Our reports also examine how existing liability frameworks and litigation dynamics can contribute to cost escalation, as well as the role of data-driven tools in better aligning premiums with actual risk.
Significantly, our research underscores specific, actionable reforms that could improve affordability while preserving consumer protections, including:
Enhanced fraud detection and enforcement tools
Improved data sharing between insurers and regulators
Strengthened oversight of claims and billing practices
Adoption of modern underwriting tools such as telematics and usage-based insurance
This research was relied upon last year by the New York City Council in connection with recent reforms (Local Law 90 of 2025) to reduce the amount of additional Personal Injury Protection (PIP) coverage required by the NYC Taxi and Limousine Commission (TLC) for for-hire vehicles and taxicabs. The law explicitly prohibits the TLC from requiring PIP coverage in an amount greater than 200% of the New York State minimum (which is currently $50,000).
Several elements reflected in Governor Kathy Hochul’s recent reform proposals are consistent with the specific findings of UTRC’s research. Our analysis further shows that staged collisions, no-fault billing abuse, and patterns of medically unnecessary treatment as significant contributors to loss costs, suggesting that targeted enforcement could meaningfully reduce premiums. Strengthening the state’s Excess Profit Laws could also lead to cost savings returned to policyholders.
The research also examines how New York’s no-fault and liability framework—including comparative fault rules that may permit recovery even where a claimant bears a substantial share of responsibility—can contribute to increased claim frequency and severity. These findings support recalibrating liability standards, reducing incentives for inflated claims, and promoting more efficient claim resolution. In addition, UTRC’s work highlights the role of modern underwriting practices, including telematics and usage-based insurance, in improving pricing accuracy by better aligning premiums with individualized risk and driving behavior.
In New York and beyond, the insurance affordability crisis is a national issue affecting multiple industries, including buses, motorcoaches, and commercial transportation sectors.The UTRC was recently asked to commence a research report on the bus and motor coach industry insurance crisis, and after the New York report, we published a national report that expands and validates many of the local issues by pointing out success stories around the country that New York should consider. For example, Florida and Texas have adopted liability frameworks that more closely align recovery with a claimant’s degree of fault, including modified comparative negligence standards that limit or bar recovery where a claimant is primarily responsible.
In fact, recent data from Florida shows the potential impact of targeted reforms similar to the ones Governor Hochul has proposed: the state’s largest insurers are delivering an average 8% rate decrease for 2026, with nearly 80% of policyholders expected to see lower premiums. Insurers have also issued significant refunds, including nearly $1 billion returned to consumers, underscoring how policy and market changes can produce real consumer savings.
In light of these findings, we respectfully urge the Legislature to prioritize targeted, data-driven reforms to address fraud, improve accountability, and modernize insurance practices as part of any comprehensive affordability solution.
UTRC remains committed to serving as an independent academic resource to policymakers. Should you or your staff have any questions regarding our research, methodologies, or findings, we would be pleased to provide additional information or technical assistance.
Thank you for your consideration.
Matthew W. Daus, Esq.
Transportation Technology ChairUniversity Transportation Research Center (Region 2 – NY, NJ)
Dr. Camille Kamga
Director, University Transportation Research Center (Region 2 – NY, NJ)Professor, City College of New York