N.Y.: Navigating the home stretch: New York state’s budget talks and the impact on insurance

As the calendar turns its pages toward the end of March, New York state finds itself in the thick of its budget negotiation process, with the April Fools’ Day deadline looming just six days away. During this time, the New York state Legislature finds itself juggling the passage of legislation outside of the budget, while earnestly negotiating the budget proposals put forth by Gov. Kathy Hochul, the Senate and the Assembly.

Amid this flurry of activity, PIA has been monitoring developments closely, especially those touching on the association’s budget priorities. These include supplemental spousal liability, Section 8 housing discrimination and modernizing the DMV online insurance verification system. Let’s delve into where these budget items stand in the negotiation process between the governor and the state legislative branch.

Supplemental spousal liability (TED, Part DD)

The introduction of the supplemental spousal liability as law happened on Aug. 1, 2023, and quickly stirred controversy, fueled by a critical editorial in the Times Union. The article highlighted an unexpected side effect of the law: increased insurance premiums for drivers. This was due to a new mandate requiring auto insurance carriers to include SSL coverage for insured drivers automatically unless they opted out of it. SSL offers no advantages to single drivers, rather it allows spouses to sue each other for damages related to negligent driving.

In response to the backslash, Gov. Hochul put forward a proposal in the FY 2025 New York State Executive Budget, TED, Part DD of S.8308-A / A.8808-A This proposal would mandate auto insurance policies to offer SSL coverage exclusively to those who indicated on their insurance application that they have a spouse, unless the insured opts out in writing. The Senate supports this approach in its one-house budget, S.8308-B while the Assembly has decided to exclude TED, Part DD from its one-house budget, A.8808-B.

Section 8 Housing Discrimination (TED, Part FF)

Following a report by the Gothamist that uncovered how several insurance companies operating in New York state routinely inquire about building owners renting to tenants with housing subsidies, such as the federal Section 8 housing program and subsequently refused to insure these buildings, the Hochul administration acted. In her 2025 Executive Budget, Gov. Hochul introduced TED, Part FF of S.8308-A / A.8808-A, a budget proposal designed to ensure fair insurance practices for properties housing low-income residents.

This proposal, which the Senate supported in S.8308-B aims to prevent insurance companies from making decisions based on the income source of tenants or the presence of Section 8 vouchers, such as policy cancellations or premium increases. However, the Assembly decided not to include this proposal in A.8808-B.

Instead, it advanced a slightly different version—through the Assembly Insurance Committee—which deviates somewhat from Hochul’s original proposal. Nevertheless, both proposals are essential for promoting equitable access to insurance for property owners and tenants alike, especially for those living in affordable housing.

DMV online insurance verification (TED, Part H)

TED, Part H of S.8308-A / A.8808-A proposes the creation of an online insurance verification system for automobile insurance, designed for use by DMV staff, insurers and law enforcement officers both at the state and local levels. Currently, New York’s method for verifying auto insurance is archaic and error-prone, relying heavily on manual processes for both insurers and DMV employees.

This outdated system increases the risk of motorists being wrongly identified as uninsured during routine traffic stops, potentially leading to financial and legal consequences. With 18 states, including California and Illinois, already implementing online verification systems, adopting this in New York as the 19th state would significantly modernize the DMV’s capabilities, streamlining the process of verifying driver insurance coverage. The Senate has incorporated TED, Part H into S.8308-B, while the Assembly has chosen to omit it from A.8808-B.

Moving forward: As New York state’s budget negotiations intensify in the lead-up to the April 1 deadline, PIA will continue to track these budget items closely, striving to ensure that the final budget reflects the interests and needs of independent insurance agents and consumers.