New York needs to pop the hood on car insurance rates

In the last five years, instances of suspected auto insurance fraud in New York skyrocketed — increasing more than 80% to a staggering 43,811 incidents in 2025 alone. 

At the same time, Long Island's average annual auto insurance premium also rose more than 80% since 2019 in some areas, reaching nearly $5,000 in communities like Inwood and Valley Stream, a Newsday Opinion analysis showed. New Yorkers pay $341 per month for full auto coverage — 52% higher than the national average, according to an analysis from Bankrate.

That's no coincidence. Fraud is real — and it's undoubtedly part of the insurance equation.

So, Gov. Kathy Hochul's efforts to curtail such deceit and, she hopes, lower car insurance costs, are welcome first steps. On their own, however, Hochul's plans don't go far enough. A more comprehensive approach, starting with shining a brighter spotlight on how rates are set, why consumers' costs have skyrocketed and how various companies' premiums compare with one another, is necessary.

But focusing on fraud, and the staged crashes that can result in enormous payouts, is not a bad place to start. Among Hochul's ideas: to make the state's Motor Vehicle Theft and Insurance Fraud Prevention Board more powerful and to allow prosecutors to seek wider criminal penalties against those involved in staged accidents. She also hopes to change the definition of serious injuries to stop people from gaming the system. And Hochul wants to limit insurance payouts for pain and emotional suffering for those acting illegally, such as drunken drivers.

That could help. As Hochul has pointed out, there is a model for success in Florida, which instituted similar reforms and saw premium declines. Premiums among private auto insurers in Florida have fallen as much as 20%, and more car insurance companies have started doing business there, fueling competition and lowering prices further.

The key to potential success here lies in New York's existing Excess Profit Law, which requires auto insurers to return profits above a certain threshold to their customers. If Hochul's policies work, insurance companies would also be required to pass on their savings to customers. New York's Department of Financial Services should take a close look at current thresholds to see if they can be lowered further to give more back to drivers, even while keeping competition among insurers robust.

This has become a monumental battle in Albany, one that pits powerful lobbying forces against one another. On Hochul's side are insurance companies and Uber, which hopes reducing its costs will allow it to lower fares resulting in higher ridership. The opposition includes New York's trial attorneys, who benefit when accident victims successfully sue. Protecting those legitimately injured in car accidents is necessary; protecting those who stage an accident or overstate their injuries — and their lawyers — is not.

State lawmakers, especially those representing Long Island, must not be distracted by the noise. Affordability remains the region's top concern and every step they can take to alleviate one of the most significant cost burdens will help.

The New York Public Interest Research Group is right to note that stuffing a policy proposal this significant into the budget is not the best strategy for a full debate. And even if Hochul and state lawmakers come to an agreement on fraud-focused reform, they must not stop there. Legislators should hold hearings and request data to examine auto insurance costs more thoroughly, discover what's behind the rate increases, and determine what else can be done. 

At the heart of this issue is how much we don't know. New Yorkers are required to have auto insurance if they own a car and yet there's insufficient information on how rates are calculated, when regulators permit an increase, and how rates compare. Under the guise of keeping information proprietary, insurance companies have long tried to keep their formulas and rate-setting practices shrouded in secrecy. Auto insurance should be more like utilities, where rates and their trajectories are clearly explained and publicized.

New York should look at Florida's comparison tool on its government website where consumers can see rates by county and family category. A quick search, for instance, shows that a woman, age 25, in Palm Beach County could get a basic auto insurance policy that meets state law for $512 a year.

Beyond that, however, the elements of the rate formula are key. While someone's driving record is obviously important, insurers often use other factors — including age, location and even credit and gender. Sometimes it makes sense;  coastal residents might pay more due to flood risk. Other times, it could lead to troubling trends, like charging more for lower income residents or for those who live in higher crime areas.

Some states require that insurers disclose more, or set their own rate guidelines. Others have eliminated problematic categories like gender, credit history and whether a driver owns or rents their home. New York should consider similar strategies.

Hochul's reforms are worth pursuing. But to really address auto insurance affordability, we need to know where we're going and why, before we start the drive.