Lower Costs, Better Transit: Governor Hochul Announces that Auto Insurance Reform Would Save MTA Nearly $50 Million Annually

Governor Kathy Hochul and the Metropolitan Transportation Authority (MTA) today announced a new MTA analysis showing that the Governor's proposal to lower the cost of auto insurance would deliver $48 million in annual recurring savings for the authority. The Governor's proposal will save money for the MTA for the same reason it will save money for millions of everyday drivers - by changing laws that force too many New Yorkers to pay through the roof for crashes that aren't their fault. Specifically, her plan will prevent the MTA from being forced to pay "jackpot" settlements for crashes in which their buses were not primarily to blame.

"New York's broken insurance system is not just hurting those who rely on a car to get around, but the millions of New Yorkers who take trains and buses every day," Governor Hochul said. "For too long, our transit agencies have been used as a deep pocket for jackpot settlements, forced to make huge payouts even when their buses aren't at fault for a collision. If our common sense reforms get passed in this year's Budget, we will produce tens of millions of dollars in annual savings, all of which can go right back to running the better, more frequent transit service that every New Yorker deserves."

The Governor and MTA leadership also announced today that all MTA funds saved through these reforms - an estimated $48 million annually - over time

will be available to invest in operating subways, buses and railroads for New Yorkers.

The MTA's analysis also found that these reforms would generate additional annual savings of as much as $25 million total for the more than 130 transit agencies in New York that operate outside the MTA region. These agencies have a combined fleet of more than 3,000 buses and collectively carry hundreds of thousands of riders each day in urban, suburban and rural communities across the state.

MTA Chair and CEO Janno Lieber said, "Governor Hochul's common sense auto insurance reform will substantially reduce MTA's exposure to windfall payouts for questionable lawsuits. Every dollar saved can be redirected back where it belongs: to delivering more frequent, more reliable transit service for New Yorkers."

The reform package modernizes New York's approach to auto liability by limiting disproportionate responsibility for certain aspects of damage awards. The MTA's fleet of buses will no longer be an easy target for big payouts when another vehicle was the real cause of an accident. These reforms are expected to save the MTA $48 million per year, savings that will allow the MTA to redirect the funds into transit service, safety improvements and infrastructure upgrades.

New York State Department of Transportation Commissioner Marie Therese Dominguez said, "Governor Hochul understands the pervasive impact that New York's antiquated liability laws have on affordability in our state, not only driving up auto insurance rates but also subjecting our public transit agencies to unnecessary lawsuits and damage awards. The reforms proposed by the governor make all the sense in the world and would allow our transit providers to focus more of their precious resources on serving riders instead of fighting lawsuits."

New York State Department of Financial Services Acting Superintendent Kaitlin Asrow said, "Governor Hochul has put together a comprehensive set of proposals that are working together to address the root causes of increasing insurance costs in the state. DFS is proud to partner with agencies across state and local government to make our roads safer and deliver meaningful savings to New Yorkers."

Governor Hochul's insurance reform proposal includes the following key pieces:

• Taking on fraud in the system by creating new legal liability for criminals orchestrating staged accidents and supporting police and prosecutors in building cases.
• Preventing people committing crimes or driving uninsured from landing jackpot payments beyond routine reimbursement for medical care or lost wages.
• Ensuring those found at fault for an accident can't sue their victims for compensation.
• Better defining what actually constitutes a 'serious injury' so that damages for pain and suffering or emotional distress are reserved for those able to objectively demonstrate that they have suffered a serious injury.
• Ensuring those minimally responsible for an accident aren't the ones left unfairly holding the entire bag if delinquent parties fail to pay up.
• Preventing insurance companies from pocketing savings achieved by reforms by requiring excess profits above a reasonable threshold get sent back to policy-holders and that insurers justify every rate increase directly to consumers and state regulators.
• Requiring insurers to offer mandatory technology discounts that incentivize safe driving.

Together, these changes will reduce windfall payouts that do not correspond to actual responsibility, returning more resources to transit functions and long-term system improvements.

Governor Hochul's auto insurance reform proposal is just one way she is supporting public transportation.

Supporting Transit Through the Proposed FY 2027 Executive Budget

In addition to liability reform, Governor Hochul's FY 2027 Executive Budget continues strong support for public transportation through:

• Continued investment in the MTA's capital program to modernize signals, improve accessibility, and upgrade aging infrastructure.
• Funding to maintain reliable subway, bus and commuter rail service in New York City and surrounding counties.
• Ongoing commitments to improve transit safety and customer experience.
• Advancing major projects to reimagine Jamaica Station and extend the Second Avenue Subway westward across 125 St.
• Historic state investment in non-MTA public transit agencies, increasing annual funding by 5.75 percent Upstate and 7.45 percent Downstate.

These investments build on the Governor's broader budget priorities to strengthen infrastructure, provide affordability for working families, and maintain fiscal discipline while safeguarding essential services statewide.

The insurance reform proposals are included in the FY 2027 Executive Budget and will be considered by the Legislature as part of the budget process ahead of the April 1 deadline.

Contact the Governor's Press Office