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If you are trying to balance a family budget in New York, higher costs are not an abstract debate. You feel it every month at the grocery store, the gas pump, and when the auto insurance bill comes due.
We recently announced a $5 billion cash-back dividend to eligible auto customers of State Farm Mutual, the largest in our 103-year history. In New York, the auto customer dividend averages about 4% of premium. In other states, it was as high as 10%. The amount varies because claims experience varies by state, and premiums reflect what it costs to pay claims in each state.
Across the country, we have also reduced auto rates in more than 40 states, saving those customers over $4.6 billion a year. New York was not one of them, and that gets to the heart of the challenge: this state has unique cost pressures that keep auto insurance premiums higher than the national average. Until those pressures are addressed, broad relief will remain limited.
What really drives long-term affordability
Whether auto insurance becomes more, or less affordable depends largely on what it costs to settle claims. Those costs include vehicle repairs, inflation, litigation, fraud and abuse. Insurance providers must remain financially strong to keep our promise to customers, even in years when losses are high. That is what customers deserve and what regulators appropriately require.
We support Kathy Hochul’s plan to fight fraud and lower costs
In her 2026 state of the state address, Gov. Kathy Hochul noted that auto insurance premiums in New York average about $4,000 a year — roughly $1,500 more than the national average and called out staged accidents and fraud as major drivers. In 2025 alone, New York insurers reported nearly 44,000 incidents of suspected motor vehicle fraud to state regulators, an 80% increase since 2020.
New York auto rates are set based on New York expenses and are not impacted by losses in other states. And every New York driver is paying more because of someone else’s fraud.
That is why we appreciate key parts of the governor’s package aimed at:
- Cracking down on staged accidents and organized fraud, including stronger tools for prosecutors. The recently introduced FRAUD Act, sponsored by Assembly Insurance Committee Chair David Weprin, would make staging a motor vehicle collision a Class E felony and allow restitution to insurers.
- Giving insurers more time to investigate suspected fraud so legitimate claims can be paid promptly while suspicious claims receive appropriate review. Current law caps the investigation window at 30 days, which can make it harder to stop complex schemes.
- Strengthening fraud enforcement statewide, including added resources and better coordination with law enforcement and district attorneys.
- Reforming the “serious injury” threshold under New York’s no-fault system with objective medical standards. The current definition is vague and applied inconsistently, which can allow minor and temporary injuries to become the basis for costly litigation. Twenty-eight other states have already addressed this; New York should join them.
Customers have power too
Addressing these challenges takes a shared effort, and customers have an important role:
- Drive safely and avoid distractions. Every crash avoided is a claim that does not get filed, helping keep costs down for everyone.
- Report suspected fraud. Staged accidents and fake injuries do not just hurt “the system,” they raise costs for you and your neighbors.
Our commitment is simple: when costs go down, customers should benefit. We will keep supporting common-sense reforms that reduce fraud, encourage safer behavior, and keep the insurance market stable, so more New Yorkers can get the affordable coverage they deserve.Lisa Stewart is senior vice president at State Farm Mutual Automobile Insurance Company.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.