N.Y.: TED Part DD: Rewarding real risk reduction—without distorting the market 

In our ongoing series examining the insurance-related proposals in Gov. Kathy Hochul’s TED budget, we’ve looked at how Part BB would strengthen premium transparency, and how other provisions could affect market stability. 

Now we turn to Part DD—an important proposal focused on something producers discuss with clients every day: loss mitigation. 

As a reminder: It has been decades since a New York state governor has included substantive insurance reforms in the Executive Budget. That alone makes this session historic. And, it makes engagement essential. 

What it does 

Part DD would require insurers to offer at least one actuarially appropriate premium discount for specific mitigation measures in residential and certain commercial property policies. 

Those measures include: 

• Fire prevention and mitigation improvements, such as smoke detectors and sprinkler systems; 

• Theft prevention measures, such as deadbolt locks and security systems; 

• Water damage mitigation technology, including smart water monitors and automatic shutoff devices; 

• Roof replacement and wind mitigation measures; and 

• Hurricane-resistant features in applicable commercial properties. 

The proposal also would require insurers to disclose both the nature and dollar amount of discounts applied to a policy, along with a conspicuous “DISCOUNT INFORMATION” notice to explain available discounts and their percentage values. 

Finally, insurers would need to report discount data annually to the New York State Department of Financial Services to enhance regulatory transparency without imposing price controls. 

At its core, Part DD would encourage policyholders to invest in improvements that reduce risk—and it would ensure that when those improvements truly reduce expected losses, premium savings follow. 

Why it matters 

Producers already know the value of mitigation. You see it in the house with a newly fortified roof. In the small business that installs a monitored alarm system. In the client who adds a smart water shutoff device in a house after a neighbor’s burst pipe. 

Part DD would reinforce a simple but powerful principle: when risk goes down, premiums should reflect it. 

That’s good for clients—and it’s good for you. 

Mitigation discounts give producers another meaningful tool to counsel policyholders. Instead of focusing solely on price, the conversation can shift to value: “Here’s what you can do to make your property safer—and here’s how that can positively affect your premium.” 

But there’s a second, broader benefit. 

New York state’s property insurance market is under pressure from increased catastrophe exposure, higher construction costs and weather volatility. When mitigation efforts materially reduce claim frequency and severity, the impact extends beyond individual risks. Fewer and less severe claims improve overall loss ratios, support underwriting stability and help moderate system-wide premium pressure. 

That is why PIANY supports Part DD. 

However, our support rests on one critical safeguard: discounts must be actuarially appropriate. 

Insurance pricing is based on risk. If a device or improvement demonstrably reduces the likelihood or severity of loss, a discount is warranted. However, mandating discounts that are not supported by credible data creates serious problems. 

Politically attractive, but unsound discount mandates can: 

• Shift costs unfairly to other policyholders; 

• Create cross-subsidization unrelated to risk; 

• Undermine rate adequacy and long-term market stability; and 

• Mislead consumers into believing a measure meaningfully reduces risk when it may not. 

In short, unsupported discounts are deceptive to policyholders and harmful to the marketplace. 

By repeatedly requiring that discounts be actuarially justified, Part DD would strike the right balance—encouraging real mitigation while preserving sound underwriting principles. 

What happens if it fails 

Because Part DD is included in the Executive Budget, negotiations will unfold between now and Wednesday, April 1, 2026. 

If provisions like this are stripped from the final budget, the opportunity to embed risk-based mitigation incentives into New York state law could be delayed for years. Again, it has been decades since insurance reform was part of a governor’s budget. 

Moments like this are rare. 

If the insurance community does not speak up in support of thoughtful, market-oriented reforms, that silence will send a message as well. 

What you can do 

Between now and April 1, PIANY members can make a meaningful difference. 

No. 1: Participate in PIANY’s District Office Visit program. Face-to-face conversations with legislators and staff remain one of the most effective advocacy tools available. Sharing real-world examples of how mitigation reduces claims—and how actuarially sound discounts support affordability—helps policymakers understand the practical impact of their decisions. 

No. 2: Respond to grassroots alerts. When action alerts are issued, take 30 seconds to respond. Personalized outreach from local agents carries weight—especially during final budget negotiations.  Contact the governor today. 

No. 3: Share your experience. If you have client stories demonstrating how mitigation improved outcomes or stabilized premiums, share them with PIANY. Real-world examples strengthen our advocacy and reinforce the connection between resilience and affordability. 

This is bigger than one bill 

Part DD is about more than discounts. It is about reinforcing the foundational principle that insurance works best when pricing reflects risk—and when consumers are rewarded for reducing that risk. 

For the first time in decades, insurance reform is part of the governor’s budget conversation. That creates a once-in-a-generation opportunity to shape policies that support producers, protect consumers, and strengthen the property insurance marketplace. 

PIANY supports Part DD because it would promote meaningful mitigation, would strengthen transparency and would preserve actuarial integrity. 

Now is the time to ensure lawmakers hear from the professionals who see these issues play out every day. 

Stay engaged. Stay informed. And, most importantly—get involved. 

New York TED 2026 series

N.Y.: Have you met TED (again)?

N.Y.: Part BB: A once-in-a-generation opportunity to improve premium transparency

N.Y.: Part CC: Protecting market stability—why Part CC misses the mark

N.Y.: TED Part DD: Rewarding real risk reduction—without distorting the market