State Pols Pass The Non-Controversial Part Of Hochul's Car Insurance Reforms - Streetsblog Empire State

State lawmakers approved budget legislation that limits insurers’ ability to unilaterally increase auto premiums and restricts consumer data used to set rates. A provision in the Public Protection and General Government bill ends “flex rates,” which previously allowed insurance companies to raise car insurance prices up to 5% without approval from the state Department of Financial Services. Lawmakers also barred the use of occupation status or profession, education level obtained, homeownership status, and ZIP code as permissible data points for determining a policyholder’s premium. These data may still be used to screen for discounts, verify whether coverage is personal or commercial, or support mass merchandising plans. The measures were added during final budget negotiations after not appearing in the governor’s initial proposal.

"Nestled in the Public Protection and General Government bill, the third budget bill passed this session, is a provision that ends “flex rates” which previously allowed insurance companies to raise car insurance prices up to 5 percent without approval from the state Department of Financial Services."

"Lawmakers also barred the use of occupation status or profession, education level obtained, homeownership status or ZIP code as permissible data points to decide a policyholder's premium. This data can still be used to screen for possible discounts and occupational data can be used to verify whether the insurance is for personal or commercial use or to facilitate mass merchandising plans, which is when an insurer partners with an organization to provide insurance to its members or employees."

"The measures were not initially included in Gov. Hochul's executive budget, which proposed different reforms to auto insurance that lawmakers did not believe would actually save New Yorkers money or require the insurance industry to make any concessions. The provisions passed on Thursday were added during the final stages of budget negotiations."

"This budget season, Hochul made car insurance her main priority on affordability, though her administration did grant insurers a 21-percent premium hike in 2024. Lawmakers in New York City, Long Island and the lower Hudson Valley, with their high cost of living, shared Hochul's desire to take on the insurance industry."

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