By Lewis Nibbelin, Analysis Author, Triple-I
New Yorkers pay the fourth-highest private auto expenditures in the USA, costing households a mean of $1,935 in 2024, or 2.23 p.c of the state’s median family earnings, based on Triple-I’s newest Affordability Outlook.
Up from New York’s common of $1,753 in 2023, Triple-I’s estimates replicate the burgeoning toll of a number of expenditure price drivers within the Empire State, a lot of that are structural elements past the insurance coverage trade. Citing information from the Insurance coverage Analysis Council (IRC) – like Triple-I, an affiliate of The Institutes – the report highlights 4 price drivers that rank among the many highest within the nation, together with:
- Restore prices: New York has the third-highest auto repairs prices in the USA, at $864 greater than the nationwide common;
- Provider expense index: New York has the third-highest service expense index for private auto insurance coverage, at 14.9 p.c of losses;
- Harm declare prices: New York has the third-highest common damage declare severity within the nation, at greater than twice the nationwide common; and
- Accident frequency: New York has the eighth-highest common frequency of non-public auto accidents within the nation, at 3.09 accidents.
Whereas visitors density, highway circumstances, and driver training can contribute to accident frequency and severity, extreme and fraudulent claims litigation additionally gas rising auto insurance coverage premiums and general prices within the state. Wiping out billions of {dollars} in U.S. financial exercise yearly, authorized system abuse prices New York residents 427,794 jobs and $7,027 for every family per yr, incomes the state a recurring spot on the American Tort Reform Basis’s listing of “judicial hellholes.”
A surge in staged crashes underpins these figures, leaving drivers more and more susceptible to fraudulent harm or damage claims. Such incidents – totaling 1,729 in New York in 2023 – hold upward stress on auto charges for all policyholders, inflating common auto premium by as a lot as $300 per yr, Triple-I estimates.
To alleviate these price burdens, a bundle of state funds proposals was just lately unveiled to safe $2 million in funding for investigations into alleged auto fraud and introduce new rules that stretch the timeframe for carriers to report suspicious claims. One other legislation would cap ache and struggling damages awarded to drivers who engaged in prison conduct, comparable to those that have been uninsured on the time of the incident.
New York policymakers additionally handed laws final month geared toward third-party litigation funding (TPLF), or funding from typically nameless buyers who can delay immediate settlements in alternate for a share of bigger harm awards, thereby propelling claims prices. Although falling wanting mandating TPLF disclosure throughout litigation, the brand new legislation parallels efficient tort reforms in different states, providing hope towards insurance coverage market stability.
Owners insurance coverage holds regular
Conversely, New York’s householders insurance coverage premiums “are comparatively common and cheap as a proportion of family earnings,” contradicting “the narrative of an affordability disaster in New York’s householders insurance coverage market,” mentioned Patrick Schmid, Triple-I’s chief insurance coverage officer, in written testimony to state lawmakers.
With a 2.11 p.c ratio of house owners insurance coverage expenditure to median family earnings, New York ranks 29th in an affordability research by the IRC, suggesting property and alternative prices contribute to the state’s housing affordability points.
Coverage interventions in insurance coverage markets “would tackle a symptom somewhat than the trigger” of such points, Schmid harassed, urging lawmakers to focus as an alternative on enhancing constructing materials and labor prices; litigation tendencies; and different inflationary pressures.
Whereas the particular coverage levers might differ, Florida’s authorized reforms in 2022 and 2023 led to 17 new insurance coverage firms getting into the state and fee reductions for dozens of house owners and auto insurers, together with a 6.5 p.c common fee lower for the state’s prime 5 private auto insurers in 2025.
As soon as a “poster little one” for authorized system abuse, Florida’s success demonstrates the necessity for continued reform in 2026 to advertise a extra aggressive insurance coverage market and larger affordability for shoppers.
Be taught Extra:
Triple-I Testifies on New York Insurance coverage Affordability
Florida Governor Touts Auto Insurance coverage Rebates, Tort Reform Success
Litigation Reform Works: Florida Auto Insurance coverage Premium Charges Declining
Insurance coverage Affordability, Availability Demand Collaboration, Innovation
Disasters, Litigation Reshape Owners’ Insurance coverage Affordability
