With urging from a coalition of drivers and companies, the New York City Council voted 50-0 (with one abstention) in June to change the amount of personal injury protection (PIP) insurance coverage that the city’s for-hire vehicle (FHV) and yellow taxi drivers have to buy. The measure lowers the minimum limit of PIP coverage per person from the current $200,000 to $100,000, in the hopes of reducing premiums and disincentivizing fraud.
The City Council measure, which was sent to Mayor Eric Adams for approval, would prohibit the Taxi & Limousine Commission (TLC) from requiring the vehicles it licenses to have PIP (also known as no-fault) liability coverage in an amount 200% greater than what is required by state law. The move was led by Council Member Carmen De La Rosa and the Uber-backed coalition, Citizens for Affordable Rates. If it becomes law, the lowered coverage would go into effect March 1, 2026.
Supporters of the measure maintain that the lower PIP limit will reduce fraudulent claims that raise premiums for drivers and hike fares for riders. According to a report by the New York State Department of Financial Services, suspected no-fault insurance fraud reports accounted for 75% of all fraud reports it received in 2023.
Supporters had hoped to lower the limit for-hire drivers from $200,000 to $50,000 per person, which would align with the state’s requirement for all other drivers. De La Rosa estimated it would save drivers about $600 a year – but she expects the savings to be closer to $300 a year with the $100,000 limit.
David Do, chair of the city’s Taxi & Limousine Commission (TLC), told City Council’s transportation committee in February that he isn’t convinced drivers will benefit. “Any savings may be kept by insurers and not passed to drivers,” he said.
Supporters of the bill hope it will attract more insurers to NYC’s for-hire market as the American Transit Insurance Company (ATIC), which insures more than 60% of the industry, is facing insolvency. ATIC blames fraud caused by the no-fault system.
“Now it is time for New York State to play its part and for Albany to follow the Council’s lead in instituting meaningful reforms,” said Matthew W. Daus, Esq., author of the report, The New York City Taxi & For-Hire Vehicle Insurance Crisis: Root Causes & Solutions. “While we have a long road ahead of us, the enactment of Intro. 1050 sends a strong message to the insurance industry that NYC leadership is serious about attracting marketplace competition, as well as in reducing fraud and excess premium costs for drivers.”
Mayor Adams has until mid-July to either sign the bill into law, veto it, or allow it to become law without his signature.
Sources: Insurance Journal, Windels Marx
