Every New Yorker feels the strain of an affordability crisis that keeps pushing up the cost of groceries, fuel, and simply getting to work. While public attention often focuses on housing and inflation, one major driver of this crisis is the skyrocketing cost of auto insurance. For millions of families and small businesses, it has become a “hidden tax” on daily life and economic mobility.
New York has long ranked among the most expensive states in the nation for car insurance.
Today, the average driver in New York pays well over $4,000 a year for full coverage, nearly 40 percent higher than the national average. Some drivers in the NYC area pay close to $7,000 annually. Even minimum coverage can exceed $1,700, with premiums rising far faster than inflation. For many households, staying insured now means sacrificing necessities elsewhere in the family budget.
These rising costs are also threatening the industries that keep New York moving.
Trucking and motorcoach transportation – the backbone of commerce, tourism, and regional connectivity – are being squeezed to the breaking point. Over the past five years, commercial auto insurance premiums have surged by more than 300 percent (not a typo), while coverage levels have been sharply reduced. Insurers have left the New York market altogether, unwilling to absorb the escalating risks.
For many trucking companies, motor carriers, and bus operators, insurance has become the single largest expense after employees. When those costs spike, the consequences are felt statewide, rippling across the economy. Higher insurance costs translate directly into higher prices for groceries, construction materials, and medical supplies. When bus operators can no longer afford insurance coverage, fares rise or routes are cut – isolating communities and limiting access to jobs, schools, and medical services.
At the heart of this crisis is a deeply flawed no-fault insurance system that has become a magnet for fraud and abuse. According to the State Department of Financial Services, roughly three out of every four insurance fraud cases in New York involve staged auto accidents and inflated or fabricated medical claims. These schemes are often run by organized networks that exploit a system requiring insurers to pay claims quickly, even when fraud is suspected.
The cost of this abuse is borne by every honest driver. Experts estimate insurance fraud adds more than $300 a year to the average family’s premium. It’s even more for commercial operators. For transportation fleets with hundreds of vehicles, those added costs can reach millions of dollars annually, forcing companies to scale back operations or shut down entirely. The result is fewer jobs, less competition, and higher costs passed on to consumers. No one wants that.
Governor Kathy Hochul has made affordability a central priority of her administration, and her newly released plan to lower insurance costs reflects that commitment. By directly confronting fraud, abuse, and market instability, the Governor has acknowledged what drivers and businesses have known for years: auto insurance costs are a major contributor to the affordability crisis facing New Yorkers.
But real reform cannot happen without legislative action.
The solutions are straightforward and long overdue. New York should establish permanent enforcement units focused on organized insurance fraud. Insurers must be given reasonable time to investigate suspicious claims before being required to pay, ending the costly “pay-and-chase” system that rewards bad actors. And penalties must be strengthened for those who orchestrate and profit from fraudulent schemes, including shady medical providers and law firms that enable them.
These reforms would stabilize the insurance market, lower costs for drivers, keep small businesses operating, and preserve essential transportation services across the state.
The auto insurance crisis is not a niche issue. It affects what New Yorkers pay at the pump, at the grocery store, and online. Governor Hochul has put forward a plan to address this growing problem. Now the Legislature must step up, work with the administration, and deliver the relief New Yorkers urgently need.
Affordable insurance is essential to an affordable New York. The path forward is clear, and it’s up to lawmakers in Albany to close the deal.
Dan Rodriguez is Vice President of Public Affairs at Coach USA; Zach Miller is Vice President of Government Affairs at the Trucking Association of New York.
