New York City Mayor Eric Adams signed legislation into law in July cutting the amount of personal injury protection (PIP) coverage required to operate for-hire vehicles (FHVs) and yellow taxis in the city in half. The new law reduces the PIP – or no-fault insurance – minimum from $200,000 to $100,000 per person.
Supporters had hoped to lower the limit to $50,000 to align with the rest of the state but remain hopeful the change will dramatically reduce fraud and lower rates by attracting new insurers. They say the $200,000 mandate spurred litigation and fraudulent claims, citing a NY State Department of Financial Services report that estimated the high PIP minimums caused up to 75% of all fraud reports in 2023.
“For years, New York City’s for-hire drivers have been burdened by an unjust, outdated insurance mandate,” said Council Member Carmen De La Rosa, lead sponsor of the bill. She says the $50,000 minimum could have saved drivers about $600/year but thinks the savings will be closer to $300/year with the $100,000 limit.
David Do, chair of the city’s Taxi & Limousine Commission (TLC), says he 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,” he told City Council’s transportation committee in February.
Sources: Insurance Journal, NYC Office of the Mayor
