Analysis: Hochul Won on Car Insurance - But Crash Victims Will Pay - Streetsblog Empire State

"Hochul's "State of the State" address on Jan. 13 included a long section, "Cutting Auto Insurance Costs," that pushed her chips to the center of the table: she would reduce New York State's supposedly high car insurance rates by reducing some victims' compensation, juggling some liability rules that have been on the books for decades and, vaguely, cutting down on "fraud.""

"In doing so, she was following a playbook drafted by Uber, with the tech company launching an $8-million-plus lobbying effort that featured actors who were paid to praise the plan. Within days of Hochul's speech, victims advocates, trial lawyers and plenty of state legislators were rallying against the proposal. Journalists got into the fray, too: The notion of fraud was debunked, disputed and debunked again."

"But here's what happened: Hochul got almost everything she wanted on car insurance. What didn't she get? She failed to change "joint and several liability," a critical feature of state law that allows victims to be fully compensated, even if the party most responsible for the crash can't pay the jury-awarded damages. In such instances, another party, even one with far less than 50 percent responsibility for the crash, pays out the remainder."

"Hochul wanted to change that, so a less-responsible party doesn't end up holding the bag. And she had the support of the MTA, which argued that under the current law, it ends up paying "jackpot payouts" because lawyers target the agency knowing that even if it was, say, 8 percent responsible for a crash, it could be held liable"

A proposal to cut New York auto insurance costs was presented as reducing high rates by adjusting victim compensation, liability rules, and vague fraud-related measures. The plan followed a lobbying playbook associated with Uber, supported by paid promotional efforts. After the proposal was announced, victims advocates, trial lawyers, legislators, and journalists challenged claims about fraud and warned that victims could be left without full compensation. The proposal succeeded in many areas, but it did not change joint and several liability, which allows victims to receive full jury-awarded damages even when the most responsible party cannot pay. The governor sought to limit payouts by less-responsible parties, with the MTA arguing the current system leads to large payouts targeted by lawyers.

Read at Streetsblog Empire State