Trial lawyers and several New York lawmakers are going toe-to-toe with Gov. Kathy Hochul over car insurance reform, saying the governor’s proposal will put money in the hands of insurance companies — not New Yorkers — and will further burden car crash victims.
On Monday, March 30, a day before the budget is due, Assemblymember Jen Lunsford, D-Rochester, joined New York State Trial Lawyers Association president Andrew Finkelstein and New Yorkers affected by car crashes at the New York State Capitol to both oppose some of the auto insurance legislation pitched by Hochul and to encourage the passage of a bill they say would address what rates are set on and the way insurance companies can raise rates.
“When we’re talking about trading away victim rights in exchange for savings to regular New Yorkers, we need to see if the return on our investment will be sufficient enough to justify the loss of the rights of the people who are injured or who lose loved ones,” Lunsford said about Hochul’s proposals. “And from my perspective, I don’t think they are.”
Here’s the latest.
What is Hochul proposing to lower the state’s car insurance rates?
The state has some of the highest car insurance rates in the country, according to Hochul, and some estimates stated car insurance premiums were inflated by as much as $300 per year on average.
While neither the state Assembly or Senate included any of the governor’s legislation in their one-house budgets, here’s what Hochul is proposing to lower New Yorkers’ car insurance costs:
A previous memo from the trial lawyers says the “serious injury” definition change would deny court and compensation access to crash victims who suffer traumatic brain injuries, concussions, comas and other significant but not yet permanent injuries, leaving them unable to work with overwhelming medical bills.
And capping non-economic damages at $100,000 for certain accident victims would “weaken rights, limit access to care, reduce accountability, and transfer accident-related costs from wrongdoers and insurers to victims and taxpayers without doing anything to address the causes of high premiums,” the trade group said.
Finkelstein said nothing has been provided by the governor to outline the benefits she asserts her plan will deliver for New Yorkers.
“There’s a reason why the insurance companies and Uber have been funding the governor’s campaign. It’s because they expect the return on the investment and the return on their investment is going to come on the backs of New Yorkers who have been injured,” Finkelstein said.
“There is no connection between her proposals and reductions of premiums, but there’s a direct connection between her proposals and the profits of insurance companies.”
Hochul’s office, however, is calling the pushback a “desperate attack” on the governor as she works to “save New Yorkers money and root out fraud, waste and abuse.”
“Right now, our broken car insurance system makes a few New Yorkers rich at the expense of skyrocketing costs for the many,” a spokesperson for Hochul’s office said. “It’s time we put an end to that broken system and get that money back in New Yorkers’ pockets.”
How this bill would help New Yorkers
The bill, which was introduced in the Assembly by Lunsford and in the Senate by Sen. April Baskin, D-Buffalo, in early March, would regulate auto insurers by requiring prior approval of rate increases before they can take effect.
“Right now, insurance companies can raise their rates 5% every year without even asking permission,” Lunsford said. “So by changing the ways rates are set by addressing the way (Department of Financial Services) approves or denies those rates, we’re going to be able to actually affect the rate itself, rather than amorphous things floating around the system, which is really more of what the governor’s (proposal) does.”
Lunsford, who previously served as a personal injury attorney in upstate New York, also said it would change the criteria to determine car insurance rates.
“You and I will have different rates simply because I’m a female and you’re a male,” Lunsford explained to a reporter. “If I have a higher level of education versus a lower level of education, I pay less than someone else. Those have nothing to do with our actual driving records.”
According to Lunsford, the proposed legislation gets rid of the use of non-driving factors such as credit score and ZIP code to set rates.
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers’ taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rochester Democrat and Chronicle: Kathy Hochul’s car insurance overhaul faces major roadblock in Albany
Reporting by Emily Barnes, New York State Team / Rochester Democrat and Chronicle
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