With urging from a coalition of for-hire vehicle drivers and companies including Uber, the New York City Council voted to lower a for-hire vehicles’ insurance requirement in hopes of lowering premiums and disincentivizing fraud.
The lawmakers voted 50-0 (with one abstention) to change the amount of personal injury insurance coverage that the city’s 74,000 Uber, Lyft, yellow taxi, and livery drivers have to buy. The measure lowers the minimum limit of personal injury protection (PIP) coverage per person from the current $200,000 to $100,000.
The $200,000 in PIP coverage that drivers in New York City have been required to maintain is four times the $50,000 per person requirement for similar drivers throughout the rest of the state.
The City Council measure, which has been sent to Mayor Eric Adams for his approval, will prohibit the Taxi and Limousine Commission from requiring the vehicles it licenses to have personal injury protection (also known as no-fault) liability coverage in an amount greater than 200% of the amount required by state law for drivers elsewhere in the state.
The move to change the insurance was led by Council Member Carmen De La Rosa (D-Manhattan, District 10) and the Uber-backed coalition, Citizens for Affordable Rates (CAIR).
“For years, New York City’s for-hire drivers have been crushed by an unjust, outdated insurance mandate that inflated costs, limited their options, and unleashed widespread fraud. In the middle of an affordability crisis, drivers were stuck paying the price for a broken system,” said De La Rosa. “But today, the Council came through.”
Backers of the measure maintain that the lower PIP limit could reduce fraudulent claims that raise premiums for drivers and hike fares for riders. According to a report by the New York State Department of Financial Services, suspected no-fault insurance fraud reports accounted for 75% of all fraud reports the department received in 2023.
Supporters had hoped to lower the limit for-hire drivers from $200,000 to $50,000 per person, which would align with the state’s requirement for all other drivers. That would have saved drivers about $600 a year, according to De La Rosa. Instead, the savings might be more like $300 a year with the $100,000 limit.
Bill Aims to Drive Down New York City Taxi Drivers’ Insurance Costs. But Will It?
The head of the city’s Taxi and Limousine Commission (TLC) isn’t convinced drivers will benefit. “It is not clear premiums would go down as any savings may be kept by insurers and not passed to drivers,” TLC Chair David Do told the New York City Council’s transportation committee during a February hearing.
Backers of De La Rosa’s bill also see it attracting more insurers to the city’s for-hire market at a time when the insurer for more than 60% of the market, American Transit Insurance Co. (ATIC), is facing insolvency. ATIC has claimed it has been a victim of no-fault system fraud.
Uber Spends Six Figures on Ads in Latest NY Insurance Reform Push
The city’s measure is one element of a broader campaign by Uber and CAIR to address the high cost of insurance in the city and across the state. CAIR is advocating for reforms targeting no-fault insurance fraud and unnecessary litigation. The group has run a media campaign calling on lawmakers in Albany to act.
Was this article valuable?
Here are more articles you may enjoy.
Hedge Funds Face California Rebuke Over Role in Wildfire Claims 
Man Charged After Claiming Deer Damage in What Was Actually a Fatal Hit-and-Run 
Florida Appeals Court Says Plaintiff Can’t Harp on Adjusting Delays in Claims Dispute 
Companies Delay Impact Reports With DEI, ESG Under Attack 
