Editorial: Auto insurance rates need reform

Commercials proliferate throughout the media promising you can achieve dramatic cuts in your car insurance if you will take a few minutes to ask for comparative rates from many companies. New Yorkers who have spent time seeking lower rates know the rates they get from company to company for comparable coverage tend to be very similar.

Following a visit to a Deer Park auto body shop, Gov. Kathy Hochul concluded insurance premiums are sorely in need of reform, attributing part of the problem to escalating costs of injury lawsuits from “staged crashes.” There are drivers who work with unscrupulous attorneys, doctors and body shop operators to claim large settlements based on fraudulent claims. The governor stated that in 2023, there were more than 38,000 instances of insurance fraud in New York, including more than 1,700 staged crashes.

Insurance companies pass those excessive costs along to the rest of insured drivers to cover their losses. We all share in the cost of fraud. And there’s no doubt fraud is a factor for our high insurance costs. But we wonder if other factors also contribute to our rates.

Insurers know the rates competitors charge and, as with any business, they look to come in with similar quotes.

The governor said New Yorkers pay $1,500 more than the average cost for car insurance compared to other states. On Long Island car insurance rates from reliable companies tend to be between $4,000 and $8,000 a year, she said.

Those who can bundle insurance can realize savings, as can drivers who take a safe driving course every three years. But we’ve checked quotes from several reputable companies and none of them is offering coverage for $38 a month, as is constantly advertised. Nor did we expect such a rate from a reliable insurance carrier.

Representatives of these companies confirm Gov. Hochul’s view about fraudulent claims being responsible for their rates.

Yes, there are more drivers in New York than in most states, but we would think the incidence of fraud per capita would balance out from state to state.

We applaud Gov. Hochul for focusing on an effort to reduce rates with the intent of trying to bring them into line. At the same time, we would like to see a more comprehensive approach to determine all the factors that result in New Yorkers having to pay so much more than drivers in other states.