New York City Mayor Eric Adams has signed into law legislation reducing the auto insurance liability coverage that for-hire vehicles must carry.
The new law reduces the amount of personal injury protection (PIP), or no-fault, insurance coverage that the city’s 74,000 Uber, Lyft, yellow taxi, and livery drivers have to buy from the current $200,000 to $100,000 per person.
The $200,000 in PIP coverage that drivers in New York City have been required to maintain is four times the $50,000 per person requirement for similar drivers throughout the rest of the state.
The City Council backed the measure 50-0 (with one abstention).
Citizens for Affordable Rates (CAR), a group backed by Uber, hailed the change that it says will ease the financial pressure on drivers – many of whom are immigrants and small-business owners. Supporters of the change hope it will help lower premiums, disincentivize fraud and attract new insurers to the city’s for-hire insurance market.
The group contends that the previous higher $200,000 mandate fueled litigation and fraudulent claims, citing a report by the New York State Department of Financial Services that suspected no-fault insurance fraud reports accounted for 75% of all fraud reports the department received in 2023.
NYC Council Passes Bill to Lower Insurance Limits for For-Hire Vehicles
“For years, New York City’s for-hire drivers have been burdened by an unjust, outdated insurance mandate that inflated costs, limited their options, and encouraged widespread fraud. Those days are coming to an end,” said Council Member Carmen De La Rosa, the lead sponsor of the bill.
The measure signed by Adams prohibits the Taxi and Limousine Commission (TLC) from requiring the vehicles it licenses to have PIP liability coverage in an amount greater than 200% of the amount required by state law for drivers elsewhere in the state.
