Small Businesses Rally Behind Plan to Slash Auto Insurance Costs and Return Savings to New Yorkers

Credit: Citizens for Affordable Rates

From the pizzerias of Brooklyn to the medical clinics of the Bronx, New York’s small business owners are sending a clear message to Albany: The rent isn’t the only thing that’s “too damn high.” 

A coalition of more than 30 mom-and-pop employers – the literal engines of New York’s economy – is throwing its weight behind Governor Kathy Hochul’s proposal to overhaul the state’s auto insurance system. In a letter sent to legislative leaders, these neighborhood anchors warned that skyrocketing premiums are no longer just a line item; they are an existential threat to the “backbone” of New York.

Putting Money Back in New Yorkers’ Pockets

Central to the coalition’s support is a demand for real relief. The Governor’s plan doesn’t just aim to lower costs for insurance companies; it is designed to ensure those savings are returned to the drivers and shop owners who have been overpaying for years.

The reforms lower auto insurance costs by cracking down on fraud, limiting payouts for drivers engaging in unlawful behavior, and modernizing litigation rules. Notably, the plan directs the state to re-examine the Excess Profit Law to ensure savings from these reforms benefit consumers before insurers.

A System ‘Spiraled Out of Control’

For a contractor in Deer Park or a delivery van navigating the tight streets of Jackson Heights, a vehicle isn’t a luxury – it’s a prerequisite for a paycheck. But the coalition reports that many commercial premiums have surged by a staggering 50% to 100% since 2021.

The culprit? A “hidden tax” fueled by rampant fraud. Suspected motor vehicle insurance fraud in the Empire State has jumped roughly 80% over the last five years. Experts estimate this adds an average of $300 in unnecessary, hidden costs to every driver’s annual bill.

$4,000 for Auto Insurance in New York

The numbers paint a bleak picture for New York’s competitive edge. The average New York driver now shells out $4,031 annually for full coverage – nearly twice the national average.

Governor Hochul’s plan targets the root causes of the surge:

• Cracking Down on Fraud Rings: Giving District Attorneys and State Police more teeth to dismantle professional rings behind staged accidents.

• Closing Legal Loopholes: Extending the timeframe for insurers to investigate suspicious claims and capping “jackpot” payouts for impaired drivers or those committing felonies.

• Money Back to Drivers: Returning the insurance industry’s excess profits back to hardworking New Yorkers who power the state.

A Diverse, United Front

The list of signees reads like a directory of New York’s most essential services. These business owners argue they are being punished for “hard work” while “professional fraudsters” reap the rewards.

“Whether it’s a delivery van in Flushing or a service vehicle in the Bronx, our economic growth is being crushed,” the letter states.

As the state budget negotiations heat up, these 31 small businesses are urging the Assembly and Senate to treat the insurance crisis with the urgency it deserves. For the shops that survived the pandemic, the message is simple: They can’t afford to be driven off the road by a broken system.