The Real Con Job: Why Governor Hochul's Attack on Injured New Yorkers Is a Gift to Corporate Insurers, Not Working Families

The Governor's Playbook: Blame the Victims, Shield the Profiteers

Governor Kathy Hochul wants you to believe that New York's sky-high auto insurance rates are the fault of injured people and the lawyers who fight for them. In her 2026 State of the State address and a series of carefully staged press conferences, the Governor declared war on what she calls "rampant fraud and runaway litigation," promising to "slam the brakes" on a system she claims "rewards illegal behavior." She pointed to staged car crashes, fraudulent medical providers, and so-called "jackpot payouts" as the primary culprits behind New Yorkers' $4,000-a-year average auto insurance premiums.

It makes for a great soundbite. But it is, in almost every material respect, wrong.

The Governor's proposals — narrowing the definition of "serious injury," eliminating compensation for anyone found more than 50% at fault, capping non-economic damages for certain drivers, and giving insurers more time to investigate claims — are not about fighting fraud. They are about stripping legitimate rights from real injury victims to fatten the bottom lines of an insurance industry already swimming in record profits. And the receipts prove it.

Follow the Money: Who Is Really Behind This Push?

Before examining the substance, consider the source. Governor Hochul's "affordability" campaign is not a grassroots uprising of overtaxed drivers. It is an Uber-funded corporate lobbying blitz.

A shadowy organization called Citizens for Affordable Rates (CAR) — bankrolled by Uber to the tune of nearly $3 million in a single week in February 2026 — is the engine driving this campaign. CAR has already spent more than $1 million in television ads and plans to spend $7 million lobbying Albany this year. The group hired consultants at Albany Strategic Advisors and even dropped six figures on an ad campaign at SOMOS, the annual political conference in Puerto Rico where New York's power brokers gather.

How closely aligned is Governor Hochul with CAR? When Streetsblog reporters asked the Governor's office for comment on her proposal, the spokesperson didn't even bother to draft original talking points — she simply forwarded talking points that had been sent to her by an Uber spokesman.

Meanwhile, Uber itself reported that its Mobility division generated more than $25 billion in revenue in 2024, a 26% increase year-over-year. The company's insurance expenses rose by $1.3 billion that year, and it now concedes that roughly 25% of each rider's fare goes to insurance costs. Reducing those costs through legislative changes — not by making its drivers safer — is a straightforward profit play.

The Partnership for New York City, another powerful business lobby, has also been stumping for the Governor's proposals, releasing a report blaming "excessive litigation" for the affordability crisis. That report relied entirely on reports of suspected fraud from insurance carriers — not actual confirmed cases. When pressed, neither the Governor's office nor the Partnership could provide data on actual fraud convictions.

This is not a consumer protection campaign. It is a corporate profit protection campaign, dressed up in populist clothing.

The Fraud Myth: Staged Crashes Are a Fraction of a Fraction

Governor Hochul's most vivid talking point is the claim that 38,270 "suspected cases of auto insurance fraud" were reported in New York in 2023, alongside 1,729 "staged crashes." These numbers sound alarming in isolation. In context, they tell a very different story.

Staged Crashes: Less Than Half a Percent

There were approximately 381,290 reported motor vehicle crashes in New York State in 2023. If we accept the Governor's figure of 1,729 staged crashes — and these are merely alleged, not proven — that constitutes less than 0.45% of all reported crashes. Even if every single staged crash resulted in a fraudulent payout, we are talking about a rounding error, not a systemic crisis.

"Suspected" Fraud Is Not Actual Fraud

The 38,270 figure represents reports by insurance carriers of suspected fraud. These include not just staged crashes, but also cases involving theft, arson, larceny, vandalism, collision damage, falsified invoices, and fraudulent insurance cards. The Governor's office has declined to provide data on how many of these "suspected" cases led to actual prosecutions or convictions. Insurance companies have every financial incentive to flag claims as "suspected fraud" — it gives them grounds to delay and deny legitimate payments.

The Real Math on Insurance Premiums

Even the Governor's own press materials concede that insurance fraud inflates premiums by "as much as $300 per year on average." New Yorkers pay an average of $4,000 per year for auto insurance — approximately $1,500 above the national average. If fraud accounts for $300 of that, what accounts for the other $1,200? The Governor's proposals do not address the actual, systemic drivers of insurance costs — because those drivers implicate the industry she is trying to protect.

The Insurance Industry Is Not in Crisis — It Is in Clover

While the Governor tells New Yorkers that "runaway litigation" is bankrupting insurers, the actual financial data tell a starkly different story.

Record Profits — By a Wide Margin

According to AM Best, the most authoritative insurance industry ratings agency, property/casualty insurers made a record $169 billion in profit in 2024 — a 90% increase from the previous year and a staggering 333% increase from 2022. Overall premiums collected by property/casualty insurance companies surpassed $1 trillion for the first time in history.

The personal auto insurance segment specifically posted net underwriting income of nearly $14 billion in 2024, after three consecutive years of underwriting losses. Auto physical damage and auto liability combined for $37.6 billion in net profit — the greatest profit for the segment in a decade.

These record profits were made in the same year that insurers raised auto insurance rates by an average of 26%, with some states seeing increases of more than 40%.

The Industry Raised Your Rates — Then Pocketed the Money

New York's own Department of Financial Services, under Governor Hochul's control, approved rate increases of as much as 22% in late 2024. If the Governor truly believed that fraud and litigation were the primary cost drivers, why did her own regulatory agency greenlight massive premium increases without demanding proof that those increases were justified by litigation costs rather than profit-taking?

The answer is that the insurance industry's pricing model has little to do with what it pays out in claims and everything to do with what the market will bear. Insurance companies use credit scores, ZIP codes, and demographic data — not driving records — to set premiums. According to Consumer Reports and the Consumer Federation of America, a driver in the Financial District with excellent credit might pay $1,058 per year, while someone in the South Bronx with poor credit could be quoted $27,634 from the same company — a 26-fold difference having nothing to do with fraud or litigation.

Tort Reform Does Not Lower Insurance Premiums — The Industry's Own Leaders Admit It

The Governor's central premise — that restricting lawsuits will lower insurance rates — has been studied exhaustively for four decades. The conclusion is unambiguous: tort reform does not lower insurance premiums.

The Industry's Own Admissions

The American Insurance Association has stated: "The insurance industry never promised that tort reform would achieve specific premium savings."

Sherman Joyce, President of the American Tort Reform Association: "We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates."

Victor Schwartz, General Counsel of the American Tort Reform Association: "Many tort reform advocates do not contend that restricting litigation will lower insurance rates," adding, "I've never said that in 30 years."

These are not statements from plaintiffs' attorneys. These are admissions from the leaders of the tort reform movement itself.

Academic Research Confirms It

A peer-reviewed study from the University of Pennsylvania Law School found that noneconomic damage caps — precisely what Hochul is proposing — "are not measurably affected" by consumer auto insurance costs.

A 2022 study published by the IZA Institute of Labor Economics found that the insurance market "seems, in important ways, to defy economic logic" because while caps "drive down insurance costs," premiums "do not fall in parallel with costs." Instead, caps lead to "sustained supranormal profits" for insurers.

Professor Kenneth Klein of California Western School of Law presented to the National Association of Insurance Commissioners in 2022, demonstrating a "lack of evidence for litigation having a material effect on rising premiums."

A study of Texas' aggressive 2003 tort reform found that Medicare spending per beneficiary went up more quickly in Texas after reform than in the rest of the country, and health care costs in Texas did not decrease compared to neighboring states without caps.

An NBER-published study found that tort reforms reduce employer-sponsored health insurance premiums by only 1 to 2 percent — a negligible savings that is never passed along to consumers.

The Florida Mirage

Governor Hochul has pointed to Florida as her model, claiming the state "implemented similar reforms" and "insurance premiums went down 20% over a couple of years." This is misleading at best.

Florida's premiums continued to rise significantly for at least two full years after its tort reforms were signed into law. Some improvement appeared in 2025 — but Florida also had no major hurricanes in 2025, a far more significant factor in rate stabilization. Florida still has the second-highest auto insurance costs in the nation, and independent insurance expert Dr. Martin Weiss of Weiss Ratings has reported that in Florida, "the data indicates that many insurers, perhaps assuming that tort reform would help them get away with abusive practices, denied claims more aggressively, causing more, rather than fewer, lawsuits overall."

Florida insurers win in arbitration 90% of the time. That is not a reformed system — it is a rigged one.

Who Actually Gets Hurt: Women, Children, the Elderly, and the Most Vulnerable

Tort reform is not a neutral policy. It is a wealth transfer — from the most vulnerable members of society to the most profitable corporations.

The Emory Study: Tort Reform's Hidden Victims

A landmark study from Emory University Law School by Professor Lucinda Finley found that tort reform measures, particularly caps on noneconomic damages, disproportionately reduce compensation for women, children, the elderly, disadvantaged minorities, and less affluent people.

The reason is structural: juries consistently award women more in noneconomic damages than men because women's injuries — loss of consortium, disfigurement, reproductive harm, caregiving capacity — are disproportionately non-economic in nature. Children, retirees, and the unemployed have low or no lost wages, making noneconomic damages the primary measure of their harm.

A cap on noneconomic damages is, in practice, a cap on justice for the people who can least afford to lose it.

The Texas Example

After Texas enacted its sweeping 2003 tort reform:

• Total payouts dropped by 78% for adult nonelderly claimants and 80% for elderly claimants.

• The elderly — 10% of the population but 35% of medical spending — represent only 17% of large paid claims and 10% of payouts.

• Only 25% of elderly payouts are attributable to economic damages, compared to 57% for nonelderly adults, meaning damage caps hit the elderly hardest.

This is the model Governor Hochul wants to import to New York — a state with 300,000 older adults facing mistreatment annually, and nursing home residents among the most vulnerable people in the system.

The Real Cost Drivers the Governor Won't Talk About

If fraud and litigation are not the primary drivers of New York's high insurance costs, what is? The answer is multifold — and none of it has to do with injured people seeking fair compensation.

Larger, Deadlier Vehicles

Today's vehicles are heavier and more powerful than ever. The proliferation of SUVs and trucks causes more severe injuries in crashes, driving up both medical costs and claims severity. The average cost per private passenger auto claim has reached almost $13,000, an increase of more than 10% year over year in 2024.

Climate Change and Natural Disasters

Floods, storms, and extreme weather events destroy more vehicles every year. Every major natural disaster produces thousands of "totaled" cars, and those replacements are more expensive because modern vehicles are packed with costly technology.

Credit-Based Pricing and Discriminatory Rate-Setting

As documented by the Consumer Federation of America and the National Consumer Law Center, insurance companies use credit scores, ZIP codes, and demographic proxies to set rates — practices that bake in longstanding inequities of race and income. States like California, Hawaii, and Massachusetts prohibit insurers from using credit scores; New York does not.

Distracted Driving

NHTSA data show that distracted driving remains an epidemic, with 3,308 people killed and an estimated 289,310 injured in distraction-affected crashes in 2022 alone. This is a behavioral and enforcement problem — not a litigation problem.

The Real Numbers: Traffic Violence Is the Crisis

The New York State Comptroller reports that motor vehicle fatalities in New York rose 25.8% from 2019 to 2022, reaching the highest level in a decade with 1,175 deaths in 2022. The state Department of Health documents an average of 1,098 fatalities, 12,093 hospitalizations, and 136,913 emergency department visits each year — one emergency visit every four minutes. Fatal and serious traffic crashes cost New York an estimated $135.4 billion in societal harms in 2023 alone.

The real insurance crisis is not that too many people are suing. It is that too many people are being killed and seriously injured on our roads — and the Governor's response is to make it harder for survivors to recover.

What These Proposals Actually Do to Real Victims

Let us be specific about the human cost of Governor Hochul's proposals.

Narrowing "Serious Injury"

Under current law, victims of crashes can pursue compensation for pain and suffering if they have a "serious injury," which includes non-permanent injuries that prevent them from performing their daily activities for more than 90 days. The Governor wants to eliminate that category entirely.

Consider what this means in practice: a construction worker struck by a negligent driver who suffers broken ribs, torn ligaments, and severe bruising — injuries that keep him out of work for three months but eventually heal — would lose his right to be compensated for his pain and suffering. His $50,000 in no-fault coverage, a figure that has not been adjusted since the 1970s (worth approximately $329,000 in today's dollars), may be consumed within 48 hours of a hospital stay.

The 50% Fault Threshold: Gutting Comparative Negligence

New York currently uses a pure comparative negligence system, meaning compensation is proportional to fault. If a jury finds you 30% at fault, you recover 70% of your damages. The Governor wants to bar all recovery for anyone found more than 50% at fault.

This sounds reasonable until you understand how fault is determined. Juries can and do assign fault to cyclists who weren't wearing helmets (not required by law), pedestrians who crossed outside a crosswalk, or motorcyclists who lane-split. Under the Governor's proposal, a pedestrian struck by a speeding, texting driver could recover nothing if a jury determines the pedestrian was 51% at fault for crossing against the light.

This will not reduce fraud. It will reduce the number of attorneys willing to take legitimate cases, because the risk of total loss makes marginal cases uneconomical to pursue. The Governor is not weeding out fraudulent claims — she is building a system in which real victims cannot find representation.

Empowering Insurers to Delay Legitimate Claims

The Governor proposes increasing the time insurers have to investigate fraud from 30 days to an unspecified longer period. In practice, this means injured people — already facing mounting medical bills and lost income — will wait even longer for legitimate payments while their insurer decides whether to label their claim as "suspected fraud."

The Real Solutions the Governor Should Be Pursuing

If Governor Hochul genuinely wants to lower insurance costs for New Yorkers, the tools are available — and none of them require taking rights away from injured people.

1. Regulate Insurance Pricing. Require that premiums be based primarily on driving records, not credit scores and ZIP codes. Follow the lead of California, which passed Proposition 103 in 1988 and has seen consistently lower rate increases than comparable states.

2. Demand Data Transparency. Before stripping away victims' rights, require insurers to open their closed-claims data, frequency and severity trends, and reserve practices to public inspection. No lawmaker should vote to limit New Yorkers' rights without first seeing the actual numbers.

3. Reduce Crashes. The most effective way to reduce insurance claims is to reduce crashes. Invest in road safety infrastructure, automated enforcement, and Vision Zero initiatives. Require insurers to be notified when policyholders receive repeat speed-camera violations.

4. Prosecute Actual Fraud Aggressively. Nobody in the plaintiffs' bar opposes prosecuting staged accidents. Give prosecutors the resources to dismantle fraud rings — but do not use fraud as a pretext to dismantle the rights of legitimate victims.

5. Update No-Fault Coverage. The $50,000 no-fault coverage limit has not been adjusted since the 1970s. Adjusted for inflation, it should be approximately $329,000. Increasing this amount would reduce the need for litigation in the first place by ensuring victims' medical costs are adequately covered.

The Bottom Line

Governor Hochul is not fighting fraud. She is fighting for Uber, for the insurance industry, and for corporate interests that have invested millions of dollars in her reelection and in lobbying Albany. Her proposals will not meaningfully reduce insurance premiums — the industry's own leaders admit tort reform has never accomplished that. What they will do is strip rights from the most vulnerable New Yorkers: the elderly nursing home resident, the pedestrian struck in a crosswalk, the construction worker injured on the job, the child left with a lifelong disability.

For every staged crash the Governor denounces, there are hundreds of thousands of real crashes — crashes that kill over 1,000 New Yorkers a year, that send 136,000 to the emergency room, that cost the state $135 billion in societal harm. The people injured in those crashes are not fraudsters. They are not "gaming the system." They are New Yorkers whose lives have been upended by someone else's negligence, and they deserve their day in court.

Forty years of data, academic research, and the insurance industry's own admissions confirm one inescapable truth: you cannot solve an insurance pricing problem by taking rights away from injured people. All you can do is transfer the cost of negligence from the corporations that profit from it to the families that suffer from it.

That is not reform. That is a con job. And New Yorkers are, indeed, too smart to buy it.