Staged car accidents are driving the highest auto-insurance rates in the country, New York Gov. Kathy Hochul said in a State of the State address that promises a variety of actions to fix that.
Part of the plan would be to limit the damages available for drivers who are “mostly” at fault in causing accidents and giving insurers more time to investigate claims. Hochul also hopes to target doctors who drive the value of claims with phony diagnoses and medical procedures – something lawyers and doctors are accused of conspiring to do in workplace-injury lawsuits in New York.
“We applaud Governor Hochul’s efforts to crack down on fraudulent lawsuits in the Empire State, and especially in the hotbed area of New York City, where the average family pays over $10,000 annually due to lawsuit abuse,” said Lauren Zelt, executive director of Protecting American Consumers Together.
The Lawsuit Reform Alliance of New York noted that fraud rings target immigrants and others with financial problems to stage crashes, to the detriment of lawful New York drivers whose premiums have risen to about $4,000 annually.
Florida recently passed reforms that have stabilized the auto-insurance market and brought down rates for home insurance. Florida’s top five insurers cut rates by an average of 6.5% last year, PACT said.
LRANY likewise celebrated Hochul’s announcement.
“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 Tom Stebbins, executive director of LRANY.
“They’ll also ensure the sophisticated actors who orchestrate these schemes are brought to justice and not merely the vulnerable people drawn into them.”
Hochul said insurers reported more than 38,000 incidents of suspected auto-insurance fraud in 2023, which helped tack an extra $300 onto everyone’s yearly premium.
Her plan will give insurers more than just the current 30 days to investigate and will change a law that allows individuals committing crimes like impaired driving to receive big payouts. To do so, she plans a cap on non-economic damages in those instances.
She’d also follow the lead of other states like Connecticut and New Jersey that permit recovery of damages only if the plaintiff is not primarily at fault. The term “serious injury” also needs to be more clearly defined, as its application is currently inconsistent in courts, she says.
“Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living,” Hochul said.
The ride-share company Uber has filed multiple racketeering lawsuits around the country, including in New York, that allege personal injury lawyers are sending clients to meet with doctors willing to perform invasive surgeries in order to increase the value of the claim.
