06/03/2026
🚨 Governor Hochul’s New Auto Insurance Reform 🚨
I’ve already had clients calling me asking if they’re getting an immediate credit on their insurance bill because of the new commercial. (Yes, seriously. 😂)
So let’s break this down one point at a time.
As someone who’s been in the insurance industry for nearly a decade, here’s my take:
✅ Fighting Fraud & Staged Accidents
This is absolutely a good thing.
Fraud and staged accidents cost insurance companies millions of dollars every year, and those costs get passed on to all of us. If New York can actually reduce fraud, it should help stabilize and lower rates over time.
The key phrase is “over time.”
Not next week. Not next month. Not even necessarily this year.
⸻
✅ Limiting Certain Injury Payouts
The goal here is to reduce payouts involving criminal activity, DUI-related incidents, and other situations where someone is breaking the law.
In theory, that’s a positive move.
However, there could be unintended consequences.
For example, if someone living in your household regularly drives your vehicle and isn’t listed on your policy, you could find yourself in a difficult situation after an accident.
The lesson?
Make sure all household drivers are properly disclosed and listed on your policy. Doing things the right way becomes even more important under changes like these.
⸻
⚠️ Restrictions on Rating Factors
This one is a little more complicated.
Redlining is already illegal, so that’s not really the issue.
What concerns me is that many of these factors currently allow carriers to offer discounts to lower-risk customers.
For example, homeowners often receive discounts because statistically they tend to have different risk profiles than non-homeowners.
If insurers lose some of their ability to differentiate risk, this may simply shift costs from one group of consumers to another rather than creating true savings.
To me, this feels more like taking from one pocket and putting it into another.
⸻
⚠️ More State Oversight on Rate Increases
New York is already one of the most heavily regulated insurance markets in the country.
Many carriers wait years to get rate increases approved.
While nobody wants insurance companies raising rates whenever they feel like it, there’s also a balance that has to exist.
If carriers can’t respond to market conditions, inflation, repair costs, medical costs, and claim trends, they often respond another way:
• Becoming more selective about who they insure
• Restricting new business
• Reducing coverage offerings
• Pulling out of markets altogether
We’ve already seen versions of this happen in other states and in NYS!!!
⸻
My Bottom-Line Opinion:
There are some genuinely good ideas in this reform package.
But if you’re expecting a big credit on next month’s bill because of a TV commercial, that’s not how insurance works.
The best-case scenario is that these reforms help slow future rate increases and create modest savings over time.
The worst-case scenario is that some of these changes create new market problems that end up hurting consumers in different ways.
As always, be careful what politicians promise. And trust politicians about as far as you can throw them.
(That applies to all of them. 😉)
