New York’s 2026 Auto Insurance Reforms: What Changes for Drivers
Last Updated on October 21, 2026 by James Shaffer
New York’s 2026 auto insurance reforms target the two costs that push premiums up most here: fraud and injury lawsuits. They also limit which personal factors insurers can price on and, starting November 27, 2026, require state approval before any auto rate increase. Lower premiums are the goal, but nothing in the law sets a specific cut for any driver, and any savings will show up through insurers’ rate filings and your renewals.
The changes came in the state budget for fiscal year 2027, signed in late May 2026. Some parts are already in effect and others start in November. Here is what each one does, when it applies, and what it means for your policy.
At a Glance
- Harder to Sue for Pain and Suffering: The serious-injury threshold no longer includes the 90/180-day category, and a driver found more at fault than the other side can’t recover damages in a car crash injury case.
- Every Rate Increase Needs Approval: From November 27, 2026, auto insurers need DFS approval before raising personal auto rates by any amount. Before, they could take up to 5% a year without it.
- Location Still Counts: From November 23, 2026, insurers can’t use your ZIP code, job, education or homeownership as the sole basis for your rate, but they can still rate by groups of neighboring ZIP codes.
- Savings Aren’t Guaranteed: DFS has told insurers to build the expected savings into their rates. The Governor has cited an estimate of about 10%, but your own renewal is the only real measure.
What Changed and When It Applies
| Change | Law | When It Applies |
|---|---|---|
| People who arrange staged crashes can be charged with insurance fraud | Penal Law 176.05 | Enacted May 2026 |
| 90/180-day category removed from the serious-injury definition | Insurance Law 5102(d) | Lawsuits started after the law took effect in late May 2026 |
| Drivers more at fault than the other side can’t recover in injury suits | CPLR 1411(b) | Same as above |
| $100,000 cap on pain-and-suffering damages for certain uninsured, impaired or felony drivers | Insurance Law 5104(d) | Same as above |
| Insurers told to reflect reform savings in rate filings | DFS guidance, July 1, 2026 | Pending and future filings |
| ZIP code, occupation, education and homeownership can’t be the sole basis for a rate | Insurance Law 2341 | November 23, 2026 |
| DFS approval needed for any auto rate increase | Insurance Law 2350 | November 27, 2026 |
The lawsuit changes apply based on when a case is filed, not when the crash happened, according to New York injury law firms reviewing the budget bill. If you were hurt in a crash and haven’t started a case, talk to a lawyer about which rules apply to you.
Changes to Injury Lawsuits After a Crash
New York is a no-fault state. Your own policy pays medical bills and lost earnings up to $50,000 per person no matter who caused the crash, and that basic benefit didn’t change. What changed is when someone can step outside no-fault and sue another driver for pain and suffering. Our guide to personal injury protection in New York covers how no-fault claims work.
The Serious-Injury Threshold Is Narrower
To sue for pain and suffering in a car crash case, an injured person has to show a “serious injury” as defined in Insurance Law Section 5102(d). The old definition included an injury that kept someone from their usual daily activities for 90 of the 180 days after the crash. That category is gone. The remaining categories include death, dismemberment, significant disfigurement, a fracture, loss of a fetus, and permanent or significant limitation of a body organ, member, function or system.
DFS describes the goal as reserving pain-and-suffering damages for people who can objectively show a serious injury. The 90/180-day category was the one most often argued over, because it relied heavily on how a person said the injury affected them.
Drivers Mostly at Fault Can’t Recover
New York used to let an injured person recover damages even if they were mostly to blame, reduced by their share of fault. Under the new CPLR 1411(b), in injury cases covered by the no-fault law, a claimant whose fault is greater than that of the people they’re suing can’t recover. DFS says this brings New York in line with most other states. Outside these cases, the old rule of reducing damages by fault still applies.
Example: Two drivers collide and a jury finds one 60% at fault and the other 40%. If the 60% driver sues for injuries, the new rule bars that recovery. The 40% driver can still sue, with any award reduced by their 40% share. Real cases depend on the facts and the court.
A Cap for Drivers Breaking the Law
Insurance Law Section 5104(d) caps non-economic damages, such as pain and suffering, at $100,000 for an at-fault injured driver who was:
- Driving an uninsured vehicle they were responsible for insuring, unless the coverage lapse lasted less than 30 days
- Driving while impaired and convicted of that offense
- Driving while committing or fleeing a felony and convicted of that felony
The cap doesn’t apply to cases involving a death. It’s one more reason not to let coverage lapse; see the penalties for driving without insurance in New York and the DWI and DWAI penalties that apply on top of it.
New Penalties for Staged Crashes
Staged accidents have been a costly problem in New York, especially in the no-fault system. Under Penal Law Section 176.05, anyone who hires, requests, encourages, orchestrates or invites someone else to stage a motor vehicle accident now commits a fraudulent insurance act. DFS says this lets prosecutors go after everyone involved in a scheme, not only the driver behind the wheel.
Fraud costs land in the claim data insurers use to set rates, so the state expects tougher enforcement to help premiums over time. Our article on auto insurance fraud in New York has the latest DFS fraud figures.
How Rate Increases Will Work from November 27, 2026
Under the old version of Insurance Law Section 2350, an insurer could raise personal auto rates without DFS approval, up to two increases in a 12-month period totaling no more than 5%. Starting November 27, 2026, that allowance ends for increases. Only decreases of up to 5% can take effect without prior approval.
DFS has proposed a regulation to carry this out, and it says the law and regulation take effect on that date. The proposal also requires insurers to tell policyholders about decreases taken because of the reforms and explain the reason.
Prior approval doesn’t freeze rates. Insurers can still ask for increases, and DFS can approve them if the filing supports them. It means each increase gets reviewed first.
Limits on Rating Factors from November 23, 2026
Insurance Law Section 2341 bars insurers from using any of these as the sole basis for placing you in a rating tier, moving you between tiers, or setting your rate:
- Your occupation
- Your education level
- Whether you own a home
- The ZIP code where the car is principally garaged
The law has limits that matter. Insurers can still rate by territories made up of groups of neighboring ZIP codes, so where you keep the car will keep affecting your price. They can still ask about your job to decide whether a car is used for business or commuting. And they can still offer actuarially justified discounts approved by the state’s insurance superintendent, so discounts such as a homeowner discount may stay available.
Quick tip: Your current policy doesn’t automatically re-rate on November 23. These rules apply to the rating plans insurers file and use, so any change shows up at a renewal or a new quote.
Will Your Premium Go Down?
Maybe, but there’s no set amount. On July 1, 2026, DFS told insurers to build the expected savings from the reforms into all pending and future rate filings. The Governor has pointed to a Citizens Budget Commission estimate that the reforms could cut costs by about 10%. That’s a projection, not a promise, and it won’t apply evenly to every driver.
Savings from the lawsuit changes depend on fewer and smaller injury claims over time, and claims take years to settle. Other costs, such as repairs and medical bills, keep rising. So some drivers may see a decrease, some a smaller increase than they would have, and some no visible change. For the bigger picture, see why car insurance costs so much in New York City and why insurance rates go up.
What to Do Now
- Read your next renewal notice closely. Compare the new premium with the old one line by line, and look for any notice explaining a decrease tied to the reforms.
- Ask your insurer what changed. If your rate went up after November 27, 2026, you can ask whether the increase was approved by DFS and which rating factors moved.
- Get fresh quotes. Insurers will file their reform savings at different times and in different amounts, so prices may shift between companies. Start with our reviews of New York auto insurers and the cheapest auto insurance companies in New York.
- Keep coverage continuous. A lapse already risks DMV penalties, and an uninsured at-fault driver now also faces a cap on what they can recover after a crash.
- Don’t cut injury coverage to save money. With fewer people able to sue for pain and suffering, your own no-fault, uninsured motorist and SUM coverage matter as much as ever.
If you have a question about a rate change or how a claim was handled, you can contact the DFS Auto Insurance Resource Center.
This article explains the law in general terms and isn’t legal advice. If you were injured in a crash, a New York lawyer can tell you how the new rules apply to your case.