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The Business Council strongly supports many of the auto insurance-related reforms put forward in the Governor’s budget proposal. New Yorkers pay some of the highest auto insurance rates in the country, not because we are less safe on the road, but because of fraud and high litigation rates. Specifically, The Business Council supports proposals to combat fraud and excessive litigation. Both of which currently contribute to the high premiums we are seeing throughout the state.
The proposals put forward by the Governor target fraud and abuse and excessive litigation; by doing so, risk is reduced, and loss is minimized, leading to a more stable, affordable auto insurance market for consumers in New York State. The proposals below are key to making auto insurance more affordable.
• Including staged motor vehicle accidents in the definition of insurance fraud and lowering the threshold for all types of insurance fraud. (S9005/A10005 PPGG Part F)
• Modifying and clarifying the definition of serious injury for no-fault claims and limiting the economic damages for those determined at-fault (S9008/A10008 TED Part E)
• Extending the time for insurers to investigate suspected fraud in auto claims and report to DFS from 30 days to 60 days (S9008/10008 TED Part FF)
• Modernizing the interest rate on court judgments by moving from a fixed nine percent rate to a variable market-based rate. (S9005/A10005 PPGG Part DD)
In combination, these reforms would tackle major cost drivers in the auto insurance industry and assist in avoiding increases in insurance premiums. For these reasons, The Business Council strongly supports the Governor’s proposals and urges the Senate and Assembly to include them in their final budget agreement.