Hochul’s Anti-Fraud Agenda Takes On Billboard Lawyers — and Puts New Yorkers Back in the Driver’s Seat
Rampant fraud and runaway litigation are driving up auto insurance premiums across New York, and billboard attorneys are cashing in. Charging hefty fees, wealthy lawyers pad their wallets as families struggle to keep up with rising costs. But Gov. Kathy Hochul has a plan to change things — and Albany lawmakers need to back it.
As part of her affordability agenda, Gov. Hochul is championing a comprehensive strategy to crack down on auto insurance fraud and bring New York’s civil justice system in line with other states. By tightening the definition of a “serious injury,” limiting damages for criminals or those mostly at fault, and boosting fraud-fighting resources for the state police and Department of Financial Services, New York can curb costly lawsuits and properly prosecute criminal fraud rings. Following similar reforms, 80% of Florida drivers will see real savings and relief, with insurers reducing premiums by as much as 20%.
Gov. Hochul is blunt: in New York, “car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living.”
Indeed, auto insurance costs the average New Yorker $4,000 per year — about $1,500 above the national average and among the highest in the country. In 2023 alone, New York recorded 1,729 staged auto collisions— manufactured claims which inflate insurance premiums by as much as $300 per year. That same year, the Department of Financial Services (DFS) reported 38,000 suspected vehicle-related fraud incidents.
New York’s no-fault insurance system has become a magnet for abuse, rewarding criminals and drunk drivers for creating chaos on our roads. Under this system, insurance companies compensate policyholders for damages, regardless of who is at fault for an accident. No-fault is meant to reduce litigation and court system congestion. Instead, it fuels fraud, with no-fault claims accounting for approximately 75% of all DFS fraud reports.
Organized schemes involving lawyers, medical mills, and third-party funders exploit the system. These criminal networks recruit vulnerable people as drivers, staging car accidents, exaggerating injuries, and extracting colossal settlements — even when we know they caused the accidents. When criminals stage crashes and manufacture injuries, honest drivers pay twice: once through risk on the road, and again through higher premiums.
Unfortunately, one of the most powerful special interests in Albany benefits from the status quo. Trial lawyers thrive under no-fault liability rules, allowing attorneys to profit handsomely from both legitimate and staged collisions. Fueling these efforts are their aggressive advertising tactics, like those annoyingly ubiquitous billboards — where law firm spending has surged by 260% over the past decade.
In fraud cases, attorneys often steer plaintiffs toward unnecessary medical care to inflate settlements. More than a third of claimants say their lawyer recommended medical care, and 33% say their lawyer helped them find a doctor. In the most egregious cases, plaintiffs undergo unnecessary procedures, resulting in costly hospital bills that increase claim values and ultimately raise costs for all.
With New York’s working- and middle-class households spending 7-10% of their income on auto insurance, reform and enforcement are long overdue. Gov. Hochul is taking the lead, and now the Legislature must support her proposals to deter staged accidents and limit damages for bad actors. These common-sense measures will provide meaningful cost savings for families at a time when every dollar counts.
To further disrupt coordinated fraud schemes, lawmakers should mandate disclosure of lawsuit funding contracts in court. Fraudsters use third-party litigation funding to bankroll operations and recruit vulnerable individuals to stage accidents. The Consumer Litigation Funding Act limits predatory lending practices, but funding contracts remain hidden from courts and defendants. Mandated disclosure would reveal the financial incentives driving litigation behind the scenes and expose patterns of fraud.
Each year, the legislature introduces countless proposals that contain private rights of action — bill language that authorizes more lawsuits — aimed at issues as complex as climate change and emerging technologies like artificial intelligence. Instead, Albany lawmakers should pledge to make living in New York less expensive. They can start by supporting Gov. Hochul’s efforts to tackle fraud and rein in costs — not drive them higher by passing trial lawyer-supported bills.
Excessive litigation benefits no one except personal injury billboard lawyers, who take 33% of every settlement or verdict, plus fees. Instead of fueling more lawsuits that pad law firm profits and boost their advertising budgets, the legislature should advance Gov. Hochul’s reform package and keep the focus where she placed it in the State of the State: lowering costs for New Yorkers.
Tom Stebbins is executive director at the Lawsuit Reform Alliance of New York, a nonpartisan, statewide coalition of industry associations, municipal leagues, businesses of all sizes, and everyday citizens working to fix New York’s broken civil justice system.
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