ALBANY, N.Y. — The New York Legislature passed a $268.1 billion budget with auto insurance reforms that Gov. Kathy Hochul promises will lower premiums, but drivers won’t see relief immediately.
Assemblymember Jen Lunsford, a key figure in writing the legislation, said drivers can expect savings in the next two to four years. News10NBC reporter Deanna Dewberry took an in-depth look at the reforms.
One controversial change involves lawsuits after accidents in which one party is deemed mostly responsible. On a warm summer evening in 2016, a car hit a teenage bicyclist crossing Empire Boulevard in Penfield. The teen was injured but survived.
Under the newly passed law, the teenager’s family might not be able to sue if insurers decided the teen was mostly at fault. Lunsford, who spent years as a trial lawyer, shared a similar case in which a child’s family recently sued for damages.
“A young kid was riding his bike home from school and he was at an intersection. An older woman turned into him, knocked him off his bike and broke every tooth in his mouth,” Lunsford said.
Police deemed the child partially at fault because he rode his bike into the street. But with the new law, things could change.
“There is an opportunity for the insurance company to say ah, he’s totally foreclosed from any damages including having to have fake teeth for the rest of his life because he was 51 percent at fault,” Lunsford said.
While opposed to that change in the law, Lunsford applauds changes that would cap auto insurers’ profits at 5 percent, as is the case in Florida.
“All of the money you’re seeing returned in Florida today is a result of the excess profit cap. That is the mechanism that insured that any savings realized from these reforms are actually returned to rate payers,” she said.
One factor auto insurers used to determine rates was ZIP code. For example, people in Rochester’s 14605 ZIP code were charged more than folks in Pittsford’s 14534, even when driving records were the same. That’s now against the law.
Also, prior to the newly-passed reforms, auto insurers could raise rates every year up to 5 percent without asking.
“We have now said that every rate increase needs to be approved,” Lunsford said.
News10NBC has done multiple investigations concerning how much credit scores affect auto insurance rates in New York State. Dewberry asked Lunsford whether the reforms make that illegal, and she said no. Auto insurers can still consider credit scores when establishing what drivers have to pay in auto insurance.
The reforms are the result of many compromises, and folks on neither side of the aisle are completely happy.
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