In our ongoing series examining the insurance-related proposals in Gov. Kathy Hochul’s Transportation, Economic Development and Environmental Conservation budget, we’ve looked at measures affecting transparency, market stability and mitigation. Now, we turn to Part EE, a proposal focused on improving how New York state’s no-fault auto insurance system works.
As we’ve noted throughout this series, this is a significant moment for insurance policy in New York state. It has been decades since a governor included substantive insurance reforms in the Executive Budget. That makes this legislative session noteworthy—and it makes meaningful engagement from industry professionals more important than ever.
Part EE addresses an issue that many insurance producers may not discuss in legal terms every day but see reflected throughout the marketplace: litigation costs, claims disputes and rising auto insurance premiums.
A quick refresher on no-fault
New York state’s no-fault system was created with a straightforward goal: make sure people injured in car accidents receive prompt payment for basic economic losses, regardless of who caused the accident.
In practice, that means an injured person can receive benefits from their own insurer for things like medical expenses, lost wages and other necessary costs related to the injury. These benefits are available up to the limits of the policy and can be accessed without first having to prove fault in court.
That structure was designed to speed up compensation for injured drivers and passengers while also reducing unnecessary litigation over routine accidents.
But New York state’s no-fault law includes an important safeguard that determines when lawsuits may proceed outside that system: the serious-injury threshold.
How the serious-injury threshold works
Under current law, a person generally cannot sue another covered person for noneconomic damages—such as pain and suffering—unless they meet the statutory definition of a “serious injury.”
The purpose of that threshold is to preserve the core idea behind no-fault. Basic economic losses are handled through first-party coverage, while lawsuits for pain and suffering are reserved for more significant injuries.
Part EE proposes several targeted reforms to improve how that system operates.
Most notably, the proposal would eliminate the “90/180-day” category from the serious-injury definition. This provision applies to a medically determined nonpermanent injury that prevents someone from performing substantially all of their usual daily activities for at least 90 of the 180 days following an accident.
Over time, this category has become one of the most heavily litigated aspects of the no-fault system. Because it can be subjective and often requires extensive medical testimony and discovery, disputes frequently arise over whether a claim meets the threshold to proceed in court.
Removing this category would help clarify the standard and reduce litigation over injuries that may be temporary or difficult to evaluate under the current framework.
Additional reforms in Part EE
Part EE also includes several procedural improvements designed to bring greater clarity and fairness to the system.
The proposal would clarify that fault must be determined before a court considers noneconomic damages. Establishing liability first helps avoid prolonged litigation over damages in cases where responsibility for the accident has not yet been established.
The proposal would also place a $100,000 limit on noneconomic damages—except in cases involving death—when the injured party was engaged in certain unlawful conduct at the time of the accident and later convicted. This includes operating an uninsured vehicle, driving while impaired or committing a felony.
Importantly, these provisions do not eliminate compensation. Individuals would still be entitled to recover economic losses such as medical expenses and lost wages through the no-fault system. Instead, the reform limits noneconomic damages in situations involving illegal or high-risk behavior.
Part EE would also align comparative-fault standards by barring recovery when a claimant’s responsibility for an accident exceeds that of the party from whom damages are sought, reinforcing a basic principle of fairness.
Why PIANY supports Part EE
For producers and policyholders alike, one point deserves special emphasis: Part EE does not reduce access to no-fault benefits.
Drivers and passengers would still be able to receive prompt payment for medical expenses, lost wages and other economic losses under their own policies. The proposal focuses instead on refining when pain-and-suffering lawsuits may proceed outside the no-fault system.
PIANY supports Part EE because it represents a measured approach to restoring balance in New York state’s auto insurance framework. By clarifying the serious-injury threshold and reducing unnecessary litigation, the proposal helps ensure that lawsuits remain focused on truly serious injuries.
Litigation costs ripple throughout the system. As legal expenses and claim costs increase, those pressures ultimately translate into higher premiums for drivers and businesses across the state. Targeted reforms like those in Part EE help address those cost drivers while preserving the core consumer protections that no-fault insurance was designed to provide.
Where we are now
The budget process is a lengthy and complex negotiation between the governor and the state legislature. It begins, at least publicly, with the release of the Executive Budget, but that is only the starting point. Both the Assembly and the Senate then unveil their own versions of the budget, commonly referred to as the “one-house” budgets. This step occurred earlier this week. Following a tradition established by Assembly Speaker Carl Heastie, D-83, the Assembly’s one-house budget excluded all “non-fiscal policy” items, such as the governor’s proposed insurance reforms. On the Senate side, where non-fiscal policy is often included, Section EE was deliberately left out, signaling the Senate’s desire for a broader discussion on that topic. The next phase of the state budget process will gather the governor and leaders from both the Assembly and Senate to reconcile the differences between their budgets and reach a final agreement, ideally before April 1.
What you can do
Between now and April 1, PIANY members can make a meaningful difference.
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 insurance systems work—and how rising litigation costs affect affordability—helps policymakers understand the practical impact of their decisions.
Respond to grassroots alerts.
When action alerts are issued, take 30 seconds to respond. Personalized outreach from local agents carries weight, especially during the final days of budget negotiations. Contact the governor today.
Share your experience.
If you have client stories that demonstrate how insurance coverage protected families, helped drivers recover after an accident or stabilized premiums, share them with PIANY. Real-world examples strengthen advocacy efforts and help lawmakers connect policy decisions with everyday outcomes.
As the budget process continues, engagement from insurance professionals will be critical. Part EE represents an opportunity to strengthen the no-fault system, preserve access to benefits and reduce unnecessary litigation that drives up costs for New York state drivers.
Now is the time to make your voice heard.
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
Part EE—Preserving no-fault benefits while reducing unnecessary litigation
Matt McDonough is PIA Northeast's writer, editor and content curator. Matt joined PIA Northeast in September 2023. Before that, he had been an editor for the online entertainment magazine Collider from 2021-23 as a copy editor for its lists section. Matt entered the world of journalism at his alma mater, SUNY New Paltz, writing and reporting for the college's student run newspaper, The New Paltz Oracle. He graduated from SUNY New Paltz with a Bachelor of Arts in English and a minor in Creative Writing in 2020.
