—  March 2026  —

2026 proposed legislation aims to reduce high New York auto insurance premiums by targeting fraud and restricting injury lawsuit criteria. Key proposals include tightening the “serious injury” threshold, limiting lawsuits from at-fault drivers, penalizing staged accidents, and capping payouts for uninsured or unlawful drivers, with the goal of lowering costs for consumers.

• Tightening “Serious Injury” Threshold: Legislation proposes redefining “serious injury” to limit lawsuits for non-economic damages (pain and suffering) for minor or non-permanent injuries. This includes eliminating the 90-out-of-180-day definition, aimed at reducing soft-tissue claims.
• Combatting Fraud: New legal liabilities are proposed for those orchestrating staged accidents, and insurers would have more time to investigate and report fraudulent claims.
• Comparative Fault Changes: Drivers found more than 50% at fault, or those committing a felony (e.g., drunk driving) during a crash, would have limited rights to sue for damages, aligning with a “modified comparative liability” standard.
• Limiting “Jackpot” Payouts: Restrictions on non-economic damages for uninsured drivers or those involved in illegal behavior at the time of an accident.
• Consumer Protections: Proposals require insurers to offer safe-driving technology discounts and ensure profits over a certain threshold are returned to policyholders.

—  October 2024  —

Governor Hochul has signed into law two pieces of legislation commented on by the City Bar’s Insurance Law Committee. The first will require automobile insurance carriers to offer supplemental spousal liability coverage to married persons on an opt-out basis, and to unmarried persons on an opt-in basis. The Committee supported the bill because it sensibly restricts the opt-out regime to married insureds, while making it clear that unmarried persons will not be required to accept this unwanted and unnecessary coverage or pay for it simply because they fail to fill out a form. Their report argued that regardless of the merits of an opt-out regime, at a minimum it should not apply to persons who do not benefit from this coverage at all (e.g., unmarried persons). This new law will take effect on March 26, 2025.

The second bill will allow insurers to sell business interruption insurance that is not tied to physical damage, which businesses could purchase in the event of future pandemics or other events where there may not be physical damage to the property, such as an active shooter threat. The Committee supported adding business interruption insurance as a stand-alone kind of insurance. However, the Committee raised a concern with the bill’s definition of business interruption insurance that appears to be inconsistent with the Memorandum of Support and that could lead to confusion or unintended loss of coverage. Specifically, the bill defines business interruption insurance as insurance against certain kinds of loss “resulting from a business closure,” whereas the Memorandum in Support describes it as coverage for losses resulting from a “closure or a reduction in business.” The Committee believes that if the elimination of “a reduction” in business was unintentional, then the wording of the bill should be amended; and if it was intentional, it would be helpful to the insurance community and its customers to understand the reasoning behind this narrowing of the customary definition of business interruption insurance. Unfortunately the Committee’s recommendation was not adopted and the bill was enacted as-is. The new law will take effect later this month on the 27th.

New York City Bar

—  June 2016  —

There were several bills of interest to the industry concerning anti-fraud initiatives in the last New York state legislative session.  A bill on “storm chasers” that would provide greater regulation of out-of-state roofers and other contractors who descend upon New York homeowners and businesses after a natural disaster passed the Assembly, but stalled in the Senate.

The Senate passed bills on retroactive cancellation for fraudulent payments and anti-runner legislation, but the associated Assembly bills fizzled.  The Senate also had passed a bill targeting out-of-state garaging for rate evasion, but the Assembly did not act on this measure.

The industry hopes to have these anti-fraud initiatives reintroduced and advance through the legislative process in the Fall 2016 legislative session.