New Yorkers Deserve a Path to Lower Auto Insurance Premiums

Lisa Stewart

By Lisa Stewart, Senior Vice President

If you are a New Yorker trying to balance a family budget, cost of living issues are not some far-off policy debate. You feel it every month, at the grocery store, the gas pump, and when the auto insurance bills come due. At State Farm, our independent contractor local agents and their teams hear the same thing across the state: people want coverage they can count on, at a price that makes sense.

We recently announced a $5 billion cash back dividend to auto customers of State Farm Mutual, the largest in our 103-year history. We are a mutual company, which means we do not have shareholders. When we have a stronger than expected year, and can do so responsibly, we can return value to the people we are here to serve: our customers.

This cash back to auto customers is not the same thing as a rate reduction. It is a way to share value when results are better than expected, among other factors. It is not a guarantee of what next year will look like. We think that distinction matters, and New Yorkers deserve that clarity.

In New York, the auto policy customer dividend works out to about 4% of premium. In other states, it was as high as 10%. The amount varies because claims experience varies by state, and premiums reflect the cost of risk in each state. Across the country, we have also reduced auto rates in more than 40 states, collectively saving those customers over $4.6 billion a year. New York was not one of them, and that gets to the heart of the challenge here. This state has unique cost pressures that keep auto insurance premiums higher than the national average, and until those pressures are addressed, relief will remain limited.
 

The real long-term cost driver

Whether auto insurance gets more, or less, affordable in the years ahead is impacted by whether the underlying costs of claims go up or down. Cost pressures on claims include vehicle repairs, litigation, inflation, fraud and abuse. State Farm Mutual (and all insurers) must remain financially strong to keep our promise to our customers, even in years when losses are high. This is what customers deserve and expect, and it is what regulators appropriately demand. Thankfully, in New York, customers and policymakers are rightly focused on the costs that can be reduced: fraud and abuse.
 

We support Governor Hochul’s plan to fight fraud and lower costs

In her 2026 State of the State address, the Governor pointed to auto insurance premiums averaging about $4,000 a year, roughly $1,500 more than the national average, and called out staged accidents and fraud as major drivers. She is right. In 2025 alone, New York insurers reported nearly 44,000 incidents of suspected motor vehicle fraud to state regulators, an 80% increase since 2020.

Rates in New York are set based on expenses from New York and are not impacted by losses in other states. And every New York driver is paying a premium inflated by someone else’s fraud.

That is why we appreciate key parts of the Governor’s package aimed at:

Cracking down on staged accidents and organized fraud, including stronger tools for prosecutors to pursue the people who organize these schemes. The recently introduced FRAUD Act, sponsored by Assembly Insurance Committee Chair David Weprin, would make staging a motor vehicle collision a Class E felony and allow restitution to insurers. That is the kind of specific, enforceable measure that can change the risk calculus for fraud rings that view New York as fertile ground.

Giving insurers more time to investigate suspected fraud, so legitimate claims can be paid faster while suspicious claims get the careful review they deserve. Current law caps the investigation window at just 30 days, which handcuffs the ability to identify and stop fraudulent activity.

Strengthening the state’s focus on fraud enforcement, including added resources and coordination with law enforcement and district attorneys across the state.

Reforming the serious injury threshold under New York’s no-fault system with objective medical standards. The current definition is vague and applied inconsistently, which allows minor and temporary injuries to become the basis for costly litigation. Twenty-eight other states have already addressed this. New York should join them.

Insurance rates follow loss costs. When claim costs go down, insurers are committed to reflecting those improvements in future rate filings. Addressing the underlying drivers of costs—particularly fraud, abuse, system inefficiencies, and excessive litigation—is essential to achieving sustained affordability for New York Drivers.
 

Customers have power here, too

Addressing these challenges isn’t something one company, one law or one government office can deliver alone. It takes a shared effort, and customers have an important role.

Every accident avoided is a claim that does not get filed, which helps keep costs down for everyone. Drive safely, put the phone down, and take advantage of safe-driving options when they’re available.

Report suspected fraud. Staged accidents and fake injuries do not just hurt “the system.” They raise costs for you and your neighbors.

Our independent contractor agents live in the communities they serve. They coach Little League, volunteer, run small businesses, and help customers through the worst days. That local presence matters when it comes to affordability, too. They help customers find discounts, adjust coverage, and understand what they are paying for. That guidance helps keep costs down in ways that do not always show up in a headline.
 

A simple commitment: when costs go down, customers benefit

We support common-sense reforms that reduce fraud, encourage safer behavior, and keep the insurance market stable. The reforms the Governor has proposed are important, by targeting costs that can be reduced at the source. New Yorkers deserve affordable coverage. We think that is a goal worth working on together.