N.Y. bill targets auto insurance affordability, limits noneconomic damages 

On the heels of Gov. Kathy Hochul’s State of the State address, where auto insurance reform took center stage, the state Legislature took steps to address the issue this week with the introduction of S.8905. This legislation, sponsored by Sen. Monica Martinez, D-4, would address a key factor behind New York state’s sky-high auto premiums: costly litigation and questionable claims. 

What does the bill do? 

At its core, S.8905 would limit noneconomic damage recovery for drivers who were uninsured, intoxicated or committing a felony at the time of an accident. Specifically, the bill would prohibit these parties from collecting awards beyond basic compensatory damages—like medical expenses, property damage and lost wages. Noneconomic damages—such as pain and suffering—would be off the table under these circumstances. 

This proposal aligns closely with the governor’s broader strategy to curb premium increases and restore fairness to the system. As highlighted in her January address, auto insurance affordability is a growing crisis across the state. New Yorkers are paying some of the highest rates in the country, with some downstate drivers paying more than $6,000 a year. Fraud, litigation abuse and outdated laws contribute to this unsustainable trend. 

By limiting noneconomic recovery for certain at-fault parties, the bill would address one of the governor’s stated goals: reining in meritless lawsuits that drive rising costs for everyone.  

It also would modify Section 1411 of the Civil Practice Law and Rules to ensure that these limitations stand even when contributory negligence is otherwise considered. 

What does this mean for insurance producers? 

For insurance producers, this bill represents a potentially significant shift in how claims are assessed and resolved.  

If enacted, it could help stabilize loss costs and reduce pressures on premiums—an outcome PIANY strongly supports. In fact, increasing the affordability of insurance is a top advocacy priority for PIANY in 2026. 

Of course, details matter. PIANY will review the legislation to ensure its provisions are clear, enforceable and fair. As always, the association will advocate for reforms that reduce costs without undermining the rights of responsible policyholders or burdening independent agents with new administrative complexities. 

What comes next?  

S.8905 has been referred to the Senate Transportation Committee for consideration. It has a companion bill in the state Assembly (A.9218), which was referred to the Assembly Transportation Committee last week.   

In addition, some of the governor’s insurance-related proposals, including elements of this bill, may appear in her executive budget, which will begin to be released next week. 

Regardless of how this issue progresses, PIANY will remain deeply engaged—working to ensure that efforts to reform the system ultimately benefit consumers, carriers and the agents who serve them. 

Stay tuned for more updates as the session unfolds. In the meantime, producers should prepare for more conversations with clients about the evolving auto insurance landscape—and the growing focus on accountability, fairness and affordability. 

Get involved  

PIANY needs your voice and engagement to move these efforts forward. You can:  

• Join the District Office Visit Program;  

• Support the Agents Advocacy Coalition; and  

• Share updates from PIA Northeast and amplify our message.  

Together, we can shape a better future for New York’s insurance industry.