On any given subway ride, there’s a great chance that your car is blanketed in ads for personal injury lawyers ready to fight for YOU. Same, too, on a drive along the New Jersey Turnpike: you’ll soon notice that every other billboard is for a personal injury law firm. But flip on the television and you’ll notice that every other ad is for an insurance company trying to sell you car or homeowners insurance, often with pro athlete spokespeople, lizards or catchy (or cloying) jingles. Somebody is trying to sell you something — or at least fighting over who pays when things go wrong.

Even if you don’t own a car, you’re part of this system: the MTA spends tens of millions annually insuring its bus fleet—money that could otherwise go toward service. Understanding what drives those costs matters even if you’ve never filed a claim.

Insurance companies hire actuaries like me to assess risk and set prices. Pricing insurance is similar to how firms price other goods and services: cover the cost of your inputs plus some small profit margin. The rub with insurance is that you aren’t selling a widget or a haircut, where you know reasonably well the labor and materials cost that goes in. With insurance, companies are selling a promise to pay claims in the future if they occur. Total claims can be broken down into frequency (the rate of claims occurrence) and severity (the average size of any given claim). This breakdown is not just numerical. The drivers of whether car crashes are happening are actually distinct from the drivers of how big the claims payout for those crashes are. 

There’s another breakout to note — when people buy car insurance, they are really buying a bundle of different coverages: Bodily Injury Liability covers injuries you cause others, Property Damage Liability covers damage to other vehicles and stationary property, and Personal Injury Protection is the “no-fault” coverage that pays medical bills and lost wages regardless of who caused a crash.

Gov. Hochul’s controversial proposed reforms are aimed primarily at Bodily Injury Liability and Personal Injury Protection frequency and severity. To assess whether those reforms are even the right ones, we need to know the source of New York’s allegedly high premiums.

The frequency of crashes (as measured by Property Damage Liability claims) is certainly a culprit, with New York having the eighth-highest in the nation. Notably this number rose a bit earlier in the pandemic but has flatlined and come down in recent years. There is certainly much to be done to bring down crash frequency, a topic that Streetsblog has covered extensively.

However, the frequency of Bodily Injury Liability claims has been accelerating in New York relative to Property Damage Liability claims in recent years. This “BI-to-PD ratio” is a common marker the industry uses to disentangle what’s happening in the legal system from the underlying risk of what’s happening on the roads. In New York, more injury litigation claims are being filed as a percentage of total crashes. 

In an “at-fault” state, any crash can become a lawsuit against the at-fault driver’s Bodily Injury Liability coverage, including for pain and suffering. New York’s no-fault system was designed to prevent that: Personal Injury Protection pays medical bills and lost wages regardless of fault, in exchange for giving up the right to sue unless the injury clears a “serious injury” threshold. Personal Injury Protection was meant to absorb claims and keep them out of court, except for genuinely serious cases.

So, what’s actually going on? The average crash in New York may be producing worse injuries over time mirroring the growing usage of larger, heavier vehicles which cause more damage to life and limb, resulting in more claims clearing the serious injury threshold. The problem there is that the BI-to-PD ratio has been climbing in New York while remaining flat in other no-fault states. And surely the growth in vehicle sizes is not a New York-specific phenomenon — the proliferation of Ford Super Duties in Manhattan is disquieting, but they surely proliferate in greater numbers elsewhere. This seems to be a signal of what’s happening in the legal environment, rather than on the roads.

When the system works, Personal Injury Protection will pay all the medical bills and that’s where things end. What has been increasingly frequent in New York is that Personal Injury Protection pays medical bills, and then the plaintiff’s attorneys argue that the injury meets the “serious injury” threshold, creating a Bodily Injury Liability claim that moves into litigation resulting in a large pain and suffering payment on top. New York’s Bodily Injury Liability severity is the third highest in the US and a major reason why overall premiums are so expensive. And that elevated Bodily Injury premium sits on top of an already elevated Personal Injury Protection premium, a double burden that doesn’t exist in at-fault states.

I’ll refrain from making value judgments, except for one: Insurance companies value premium growth as much as or more than profit margins. In my years as a pricing actuary, I always felt more pressure to keep rates competitive so that the company could sell more policies. In healthy markets, competition among carriers is fierce and insurance is priced on the thinnest of margins — generally a boon for consumers. But when underwriting conditions become severely challenged, you get the price increases and tightening coverage that have characterized the New York auto market in recent years.

Both Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie have expressed concerns about whether savings from the reform package will actually be passed on to consumers. This is a fair question, and Florida’s experience following similar tort reforms — where top insurers filed rate decreases in 2025 — suggests the mechanism works. 

The more legitimate concern is timing: New York carriers have been under significant underwriting pressure, with loss and expense ratios that have left little room for profit, and any savings will take time to flow through to policyholders.

This brings us back to those subway ads and turnpike billboards. The fight playing out in Albany is really about who absorbs the cost of crashes: injured plaintiffs, defendants, insurers, or New York drivers through their premiums. It’s an important debate, but it’s mostly a fight about the back end of the problem: what happens after a crash occurs. More attention must be paid to the front end. Better street design, slower speeds, smarter enforcement, and yes, insurance pricing that incorporates and rewards all of the above: these are the levers that could actually bend the curve on what New Yorkers pay.

The ads will keep running either way — that’s just commerce. The more interesting question is whether Albany can make them less relevant: fewer crashes, less severe injuries, and an insurance system priced for a state that’s actually gotten safer.