CM DE LA ROSA, DRIVERS & ADVOCATES CALL FOR URGENT AUTO INSURANCE REFORM AT KEY CITY COUNCIL HEARING
Council Considers Critical Bill to Slash Excessive Costs for For-Hire Drivers
Lowering NYC’s $200K Insurance Mandate to $50K Would Cut Premiums, Curb Fraud & Boost Market Competition
NEW YORK – Council Member Carmen De La Rosa (D-Manhattan, District 10) and advocates for for-hire drivers highlighted the urgent need to reform New York City’s excessive auto insurance mandates today at a key City Council transportation hearing. De La Rosa’s legislation, which was discussed at the hearing and now has the support of 26 council members, seeks to reduce the Personal Injury Protection (PIP) coverage requirement for TLC drivers from $200,000 to $50,000 per person, aligning it with the statewide standard.
Currently, for-hire drivers in New York City are required to maintain $200,000 in PIP insurance coverage per person – four times the $50,000 per person requirement for similar drivers throughout the rest of the state, despite the fact that TLC data show the rate of serious accidents is extremely low for FHV drivers. This disparity places an unnecessary financial burden on for-hire drivers in New York City, while also fostering an environment where insurance fraud is incentivized by the higher coverage limit.
The legislation, which has majority support in the Council, comes at a critical time for the industry as the largest insurer of taxis and Ubers in the city, American Transit Insurance Company, faces collapse, threatening the jobs of 74,000 drivers (more than 60 percent of the city’s fleet). By lowering insurance requirements, this bill will also help avert the fallout from ATIC’s insolvency.
“New York City’s for-hire drivers are paying some of the highest insurance rates in the nation because of an outdated and unfair system,” said Council Member De La Rosa, the lead sponsor of the legislation. “Today, their voices were heard loud and clear: the $200,000 insurance requirement is driving up costs, reducing market competition, and hurting the very people who keep our city moving. This bill will bring fairness, affordability, and much-needed relief to thousands of hardworking drivers.”
Key benefits of the bill include:
Lower Insurance Costs: Bringing the PIP coverage requirement down to $50,000 will significantly reduce insurance costs for all TLC drivers, who are already facing high commercial auto premiums. It is estimated the bill could save drivers around $600/year. It could also pass along savings to consumers.
Fraud Reduction: The current high PIP limits have fostered an environment for fraudulent claims, as fraudsters target the higher insurance payouts available under NYC’s $200,000 coverage limit. According to a report released by the New York State Department of Financial Services, suspected no-fault fraud reports accounted for 75% of all fraud reports the department received in 2023. Lowering the limit will help curb these abuses, benefiting both insurers and drivers.
Increased Market Competition: Reducing the PIP threshold will make the NYC market more attractive to insurance carriers, increasing competition and providing more options for drivers.
New York City drivers of for-hire vehicles, including Uber, Lyft, yellow taxi, and livery, are already covered by additional benefits through the Black Car Fund or Workers’ Compensation for yellow taxi drivers, which further diminishes the need for such a high PIP requirement. These benefits, which include coverage for medical expenses, lost wages, and death benefits, also overlap significantly with PIP coverage, making the current $200,000 threshold redundant and unnecessary.
“We represent people who came to this city to build a life for their families, but between the high insurance rates and all the other expenses, it’s harder than ever to get by. This bill would ease the pressure. $50,000 in coverage is enough, and it’ll give them a chance to actually save money. It’s time to pass this long overdue bill,” said Toyin Omolola, CEO, DSI International Inc.
“This bill is long overdue. Our city’s drivers have been paying way too much for insurance, and the City’s additional requirements make the problem much worse. Reducing this unfair burden will lower their sky-high premiums. That’s a big win. I fully support this bill, and I know many drivers feel the exact same way,” said Herb Regnier, Executive Director - Bangladeshi American Community Development & Youth Services.
The bill also comes at a critical time, as the number of insurance carriers offering commercial auto insurance in NYC has dwindled, with the largest provider facing financial instability.
“We must pass this bill now to protect drivers and make sure they can afford the insurance coverage they need without being weighed down by excessive costs. This is a big step towards tackling the affordability crisis head on,” added Council Member De La Rosa.
The bill is supported by Citizens for Affordable Rates and a growing coalition of drivers, advocates, industry stakeholders, and Council Members.
A copy of the bill is available here.