A group calling for reforms to lower insurance costs across New York has launched its first ad.
The newly-formed Citizens for Affordable Rates (CAR) blames “special interests in Albany” along with “fraud and bogus lawsuits” for driving up the costs of “just about everything” including insurance.
The television and digital ad, “Hidden Tax,” is backed by a $1 million investment from Uber Technologies and is being aired on statewide television, premium connected TV (including Hulu, Apple TV, Peacock and others) streaming services, targeted digital placements (YouTube), and local news websites.
The ad claims that fraud, bogus lawsuits and other special interest “tactics” are causing “massive rate hikes,” effectively creating a “hidden tax” on food, insurance, housing and other essential goods and services.
According to CAR, auto insurance costs in New York are nearly 40% higher than the national average, with health and homeowners’ insurance also high.
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The group maintains that low-income families are disproportionately burdened, as “rising premiums eat up a larger share of their budgets and exacerbate financial insecurity.
The CAR campaign says it will advocate for legislative and regulatory reforms.
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The founding members of CAR include Haitian Americans United for Progress, Inc., DSI International, the Council of Peoples Organization, WESPAC Foundation, and Bangladeshi American Community Development and Youth Services.
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Ridesharing industry leader Uber, one of the members of the group, has committed to funding a multimillion dollar advertising and messaging campaign for the group. Uber has expressed concerns over insurance issues and costs in New York City.
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“Insurance costs are skyrocketing in New York. As of November 2024, on average 25% of every rider’s fare goes directly to the mandatory insurance costs. We are working with CAR to try to find solutions to this problem so that riders can pay less and drivers can make more,” an Uber spokesperson told Insurance Journal.
CAR is pursuing its campaign at a time when New York City’s ride-for-hire insurance market is in crisis due to the insolvency of the market’s biggest insurer, American Transit Insurance Co. (ATIC). ATIC has claimed it has itself been the victim of a giant fraud scheme and has sued 180 medical providers. In addition, Uber has sued ATIC, alleging the insurer has a “pattern and practice” of failing to resolve the claims of some of its drivers, which has in turn provoked 23 liability lawsuits against Uber.
Insurance costs and affordability are of concern at the highest levels at Uber. In remarks on Uber’s fourth quarter 2024 performance, which was its strongest quarter ever, CEO Dara Khosrowshahi cited insurance costs as a matter of concern but stressed that Uber has made “significant progress in slowing insurance price increases through a combination of tech innovation and strong policy work.”
Khosrowshahi told analysts that Uber is taking action in terms of safer routes, safer drivers, encouraging drivers to drive more safely to try to get insurance cost down. He said Uber expects insurance costs on a per-trip basis to increase by high single digits year-over-year in 2025 (and lower if California and New Jersey are excluded). Uber is committed to keeping prices as low as possible, passing through only the insurance cost increases to consumers, the CEO added.
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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.