Gov. Kathy Hochul is spotlighting a critical issue affecting millions of New Yorkers: affordability. In her recent State of the State presentation, she used some variation of the word “affordable” 140 times, and has outlined a series of proposals to address soaring costs that have made New York one of the most expensive states to live in.
These worthwhile proposals fall short in one key area: They don’t address the root causes of skyrocketing insurance costs, which burden small businesses and consumers. Promises are easy to make; what New Yorkers need is action — now.
For downstate communities, the affordability crisis is especially severe. While insurance costs are a heavy burden across the state, they hit hardest in the metropolitan area, where residents face some of the highest premiums in the country. As insurance costs consume a larger portion of household budgets, families must make impossible choices between paying for necessities like housing, food, and medication.
New York needs a comprehensive approach that tackles the root causes of high insurance premiums. On Long Island, drivers face car insurance costs significantly higher than the rest of the state and nation. On average, we pay $4,900 annually — more than double the statewide average of $1,700, which is already nearly 40% higher than the national average. One major factor is fraudulent insurance claims and excessive litigation. Estimates suggest that staged car crashes and other fraudulent claims account for up to 10% of insurance payouts statewide. This rampant fraud — which amounts to a tax on lawful ratepayers — must be reined in.
For homeowners and renters, rising property insurance premiums — up nearly 27% on average in Suffolk County since 2020, for example — are making housing even less affordable. Reforms must ensure that rates reflect actual risk, not arbitrary factors that hike costs that are then passed on to tenants.
The rising cost of insurance also hits small businesses hard. Already struggling with inflation and high taxes, businesses are being squeezed by rising commercial insurance premiums. These hidden costs ultimately drive prices higher for everyday goods and services.
Solutions must promote transparency, fairness, and competition in the insurance marketplace while addressing the root causes of high costs — widespread insurance fraud, excessive administrative expenses, and inadequate oversight of the litigation-industrial complex.
Insurance fraud — whether through staged accidents, falsified claims, or inflated medical billing — can be tackled by giving greater resources to law enforcement to prosecute crimes, levying penalties on unscrupulous attorneys to deter the filing of bogus lawsuits, and imposing stricter penalties on offenders. Administrative inefficiencies can be reduced via standardized digital systems for claims processing and improved monitoring of spending. To foster competition and improve the state’s business climate, policymakers should incentivize new market entrants, ensuring a fairer and more dynamic insurance marketplace.
Reforms can be achieved through a mix of legislative changes, executive actions, and regulatory decisions, and we must make sure they are not derailed by lawmakers doing the bidding of special interests.
This is a fight for our future. Addressing rising insurance costs can help New York build a stronger, fairer economy where families and businesses thrive — instead of relocating to less expensive states. Hochul has made affordability a cornerstone of her administration’s agenda. It’s time to turn those words into action and deliver meaningful reforms that address the affordability crisis from the ground up.
This guest essay reflects the views of Phil Andrews, president of the Long Island African American Chamber of Commerce.
