Key Takeaways from NYS Governor Hochul’s Proposed Tort Reform

By: Katelyn Lamendola, Esq. | Associate

Thursday, March 19, 2026

Governor Kathy Hochul has proposed a sweeping package of legislative reforms with the goal of lowering insurance costs for New Yorkers. New Yorkers currently pay some of the highest insurance premiums in the country, and the administration attributes these high premiums to staged automobile accidents and insurance fraud. By limiting damages awards and restricting the serious injury threshold, Governor Hochul seeks to save New Yorkers money by modernizing what she describes as an “outdated” no-fault system.

A prominent theme of the proposal is to combat insurance in an effort to lower insurance premiums. Governor Hochul’s proposal seeks to impose criminal penalties against any individual responsible for organizing a staged accident, and not just the individual behind the steering wheel. The proposed budget includes reinvigorating the Motor Vehicle Theft and Insurance Fraud Prevention Board, partnering with District Attorneys throughout the state to build cases that prevent organized fraud and increasing efforts aimed at medical providers who participate in fraud by providing inflated medical diagnoses.

Currently the law allows individuals who are committing crimes to receive awards for non-economic damages including pain and suffering and emotional distress. These types of awards are paid with premiums contributed to by law-abiding drivers. The proposed reforms will cap payments for these damages for individuals engaged in criminal behavior including those convicted of driving while impaired, those committing or fleeing a felony, and uninsured motorists. Additionally, Governor Hochul seeks to strengthen insurer anti-fraud programs by both decreasing barriers to alleging fraud in court and expanding the timeframe insurers have to report fraud as currently, insurers only have 30 days to identify and report fraud.

New York is a “pure comparative fault” state, which means that a driver may recover damages reduced by their percentage of fault, even if they were 99% responsible for the accident. Whereas the majority of states currently use a more common-sense framework which only allows a driver to recover for non-economic damages if he is not primarily at fault for the accident.

The proposal would move New York to a “modified comparative liability” framework so that a party who is more at fault than the defendant, or more at fault than all defendants combined, would be barred from recovery.

 

Under New York’s current framework of joint and several liability for automobile accidents, a minimally culpable defendant may be required to satisfy the entire amount of non-economic damages if the party primarily responsible lacks sufficient insurance or assets to satisfy the award. The proposal would change this standard so that a party who is less than 50% at fault can only be held responsible for the damages it caused. This change seeks to limit a party’s exposure and ensure defendants pay amounts more aligned with their actual share of fault. This change is further promoted with the goal of allowing insurance carriers to reduce premiums being charged to insureds because the carrier will no longer have to account for damages caused by other parties.

The proposal also includes a significant change to New York’s “serious injury” threshold under the no-fault law. The legal definitions of a serious injury under the current law have been criticized as being vague and inconsistently applied to alleged temporary or minor alleged.

The proposal will narrow the serious injury threshold by replacing subjective standards by providing clear and objective criteria of what constitutes a serious injury. A key aspect of this change includes the elimination of the 90/180 category of injury. By narrowing the serious injury framework, Governor Hochul intends to reduce the volume of claims for non-serious injuries.

 

In sum, the proposals seek to provide New York with a modernized legislative framework and combat the cost of rising insurance premiums.