The New York Department of Financial Services (DFS) has requested that taxi insurers submit “adequate and actuarially justified rates” by August 1, 2025, in its latest move to improve the struggling insurance market. Underlying this request is the regulator’s recognition that insurers in the space have charged actuarially unsound rates for decades, which has driven out competition and left many drivers paying for coverage that may not guarantee payment, when needed.
Under a new law signed by NY Governor Kathy Hochul in May, insurers that write for-hire motor vehicle insurance will be required to submit rate manuals, rating rules, rating plans and rates for the superintendent’s approval every two years, unless the superintendent requests them more frequently.
In June, the New York City Council also passed a bill reducing the required limit for no-fault personal injury protection (PIP) coverage for taxis and for-hire vehicles down to $100,000 from the previous $200,000.
Matthew w. Daus, Esq., founder of the transportation practice group at the Windels Marx law firm, said his independent study found that the ability of every TLC driver and most passengers to have their medical expenses paid promptly would have little to no impact if the PIP requirement was reduced to the state minimum of $50,000. “The new bill goes ‘only half-way there,’ but nonetheless a step in the right direction in solving the coverage problem that has existed for decades,” he said. “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.”
Sources: Insurance Insider, Windels Marx
