New York’s latest state budget includes changes to how some auto accident lawsuits and damages are handled, a move backed by the American Property Casualty Insurance Association (APCIA).
The insurance trade group said the reforms are meant to address legal system issues that have added pressure to auto insurance costs in the state. The changes cover three main areas: New York’s no-fault “serious injury” threshold, non-economic damages for bad actors, and comparative negligence rules.
Under the reforms, New York will tighten the serious injury threshold, which helps determine when a person may seek non-economic damages such as pain and suffering. APCIA said the change is meant to ensure that those damages are tied to legitimate injuries, while still preserving compensation for medical costs and lost wages.
The budget also caps non-economic damages for bad actors. It also changes comparative negligence rules so that people who are mostly responsible for an accident cannot more easily shift costs to others.
“Governor Hochul is taking an important step to fix a system that has been driving up costs for New York families for far too long. These reforms will promote fairness in auto accident lawsuits while discouraging abuse that ultimately raises premiums for everyone,” said Kristina Baldwin, APCIA’s department vice president of state government relations.
APCIA said legal system abuse, including inflated claims, excessive litigation, and the misuse of non-economic damages, has helped push auto insurance costs higher in New York and across the country. The association said the reforms are aimed at updating older rules and closing loopholes that have contributed to those costs.
“New Yorkers deserve a system that is fair, predictable, and focused on real injuries – not one that rewards manipulation or gamesmanship. Governor Hochul’s leadership will help put the system back on track,” Baldwin said.
The association said similar reforms in other states have helped support more stable insurance markets and reduce pressure on insurance costs. APCIA said it plans to work with New York officials as the measures are put in place.
“These commonsense reforms are an important step toward improving affordability and protecting consumers. APCIA looks forward to working with the Governor and state leaders to ensure these measures are fully implemented and deliver results for New Yorkers,” Baldwin said.
