What New York's 2026 Auto Tort Reform Means for Insurers and Claims Professionals

Most of the commentary written for insurers about New York’s auto tort reform was written about a proposal. That commentary is now out of date. On May 27, 2026, Governor Hochul announced the enacted FY27 budget, and the auto-insurance reforms became law as Part EE and Part FF of S9008-C / A10008-C. The question for carriers is no longer “what would these proposals do.” It is “what do we change in claims handling, reserving, rate filing, and litigation strategy now that they are law.”

I represent both injured plaintiffs and insurance defendants in New York every week, including no-fault carriers on coverage and claims disputes. That dual vantage point is the reason this piece is written the way it is: a carrier that only hears the affordability headline will misjudge how plaintiff counsel actually responds to each change. Below is the operational read, provision by provision, written for adjusters, claims managers, SIU teams, coverage counsel, and the defense bar.

Quick answer for carriers

• The reform reduces several inputs to claim severity (threshold, fault, allocation). It does not by itself reduce premiums or reserves; that requires you to act.
• DFS has already told insurers to project reduced fraud and litigation costs into current rate filings. Over-claiming savings you cannot document is now a regulatory exposure, not just a pricing question.
• The biggest commercial-lines win is the CPLR §1602(6) repeal, which brings low-fault motor-vehicle defendants inside Article 16 for non-economic damages — material for fleet, rideshare, livery, and municipal books.

The Enacted Changes, Read From the Claims File

1. The 90/180 serious-injury category is gone

Part EE amends Insurance Law §5102(d) to delete the 90/180 category. A claimant can no longer clear the serious-injury threshold by showing a non-permanent injury that prevented substantially all usual activities for 90 of the first 180 days. Eight categories remain, anchored by fracture, significant disfigurement, permanent loss of use, permanent consequential limitation, and significant limitation of use.

For carriers this is the change that touches the most files. The 90/180 pathway carried a large share of ordinary soft-tissue and post-surgical claims into tort exposure. With it gone, the threshold defense gets stronger on exactly those cases. Practical adjustments: revise threshold-motion templates to stop treating 90/180 as the claimant’s alternate route; direct IME and record-review vendors to focus on objective findings, treatment gaps, and degenerative causation; and re-examine reserves on pending non-permanent-injury files where 90/180 was the only viable threshold theory. Expect plaintiff counsel to respond by front-loading objective proof — imaging correlation, range-of-motion testing, specialist permanency narratives — so the cases that survive will be better documented, not weaker.

2. Fault is now decided first

Part EE amends Insurance Law §5104(a) so that in actions for non-economic loss under Article 51, the trier of fact decides fault first, then serious injury. That sequencing is a defense tool. In a close-liability case, the file can now be organized around liability before the damages narrative reaches the jury. For claims handling, it means liability investigation is no longer something to defer until late discovery — it drives early valuation, mediation posture, and reserve setting.

3. The Article 51 mostly-at-fault bar makes fault percentage decisive

Part EE adds CPLR §1411(b): in personal-injury actions subject to Insurance Law Article 51, recovery is barred if the claimant’s culpable conduct is greater than the defendant’s, or greater than the combined fault of the defendants. Be precise with adjusters on the wording — it is “greater than,” not “50% or more.” A claimant at 49% can still recover; a claimant at 51% may be barred.

The claims consequence is direct: in disputed-liability motor-vehicle files, a few points of fault can become dispositive, which changes settlement leverage on every contested-fault claim. Investigate comparative fault as if it were a threshold element — because functionally it now is. In multi-defendant files, watch the combined-fault language; the comparison can be to the defendants’ combined fault, so identification of all responsible parties matters to whether the claimant clears the bar at all. This bar is an Article 51 motor-vehicle carveout. It does not convert New York to modified comparative negligence generally; premises, products, and other lines remain pure comparative.

4. The $100,000 non-economic cap is narrow and conviction-dependent

New Insurance Law §5104(d) caps non-economic loss at $100,000, other than in death cases, for specified at-fault claimants: certain uninsured operators responsible for insuring the vehicle (with a sub-30-day lapse carveout), impaired operators convicted of impaired operation, and operators convicted of a felony or immediate flight from one connected to the crash. Do not let adjusters treat this as a general damages cap. It reaches a narrow set of claimants, it is non-economic only (economic damages are uncapped), and the impairment and felony categories require an actual conviction. To rely on it, plead and develop the factual predicates — responsibility for insuring the vehicle, the lapse window, the conviction — rather than asserting it from a shorthand label.

5. The CPLR §1602(6) repeal is the commercial-lines headline

For fleet, rideshare, livery, rental, delivery, and municipal carriers, the most consequential change is the repeal of CPLR §1602(6), the motor-vehicle exception to Article 16. Article 16 generally limits a defendant 50% or less at fault to its equitable share of non-economic loss. The §1602(6) exception had kept motor-vehicle defendants outside that protection. With it repealed, a low-fault motor-vehicle defendant can now invoke Article 16’s several-liability limit for non-economic damages, subject to the rest of Article 16.

Be disciplined about the scope when you brief underwriting and reserves. Article 16 is a non-economic damages rule. Economic damages remain a separate analysis, and the other §1602 exceptions still apply. So a 10%-at-fault fleet defendant is not suddenly paying only 10% of everything — but its non-economic exposure on the classic deep-pocket scenario (minimally-at-fault commercial vehicle, heavily-at-fault underinsured driver, injured passenger) is materially reduced. Preserve the Article 16 argument from the answer forward, and push for verdict sheets that separate economic and non-economic damages cleanly.

6. Part FF: no-fault denial timing and the SIU record

Part FF amends Insurance Law §5106(a) so that an insurer’s failure to pay or deny a no-fault claim within 30 days does not automatically preclude a later denial or a defense to payment. Part FF also changes certain insurer fraud-reporting timing from 30 to 60 days. For no-fault practitioners this is the most significant procedural shift in years, because the 30-day preclusion rule has been the backbone of provider-side litigation.

The practical instruction for carriers and SIU is documentation discipline. The fights will be over how broadly courts read the new defense-preservation language and how it interacts with existing preclusion case law. Carriers that treat the change as a safe harbor will lose those fights. Build the record: document the specific facts behind a late denial, when they were learned, and how they connect to the particular claim. Generalized suspicion will not carry it.

7. Staged-accident enforcement now reaches the organizers

Separate from the civil tort mechanics, the budget expands criminal exposure for organized fraud: prosecutors can seek penalties against the people who organize staged accidents, not just the driver behind the wheel. For SIU referrals, that broadens the target set in organized-fraud rings and is the enforcement backbone the affordability argument leans on.

What DFS Told Insurers — and Why It Is a Carrier Risk, Not Just a Win

The day after the package was announced, DFS Acting Superintendent Kaitlin Asrow addressed the industry at the NYIA 2026 Annual Conference in Bolton Landing. The message that matters for pricing and compliance teams: reduced litigation and fraud costs must be projected into current rate filings now that the law is signed, with detailed DFS guidance to follow. Our full account of those remarks is here: DFS Told Insurers What NY Auto Tort Reform Really Means.

Read that as a two-sided signal. Yes, it is regulatory cover to incorporate lower projected severity. But it also means DFS now expects to see those savings in the filings — and the public, the plaintiff bar, and consumer advocates will be watching whether claim-cost reductions actually translate into rate relief. Two exposures follow. First, adjusters who cite “reform savings” to justify lower offers before any savings have been demonstrated hand plaintiff counsel a bad-faith narrative; coach against it. Second, rate filings that bank aggressive reform-driven reductions will draw DFS scrutiny on the actuarial support. The reform gives carriers a stronger claims position; it does not give them a free pass on rate adequacy or claims-handling conduct.

What Other States’ Experience Suggests — With a New York Caveat

Industry analyses point to real movement after comparable reforms. Michigan’s 2019 no-fault changes were followed by reported premium declines; Florida’s 2023 move to modified comparative liability was followed by reported rate reductions and fewer liability filings; Louisiana enacted similar reforms in 2025. The Governor’s office cited Florida’s roughly 5.6% average rate decrease and nearly $1 billion returned to policyholders by one carrier as the supporting comparison.

The honest caveat for New York carriers: those packages were not identical to New York’s, and New York’s bar is narrower (an Article 51 motor-vehicle carveout, not a general 50% bar). New York’s no-fault overlay, jury pools, and litigation culture are their own variables. Treat the out-of-state data as directional for modeling, not as a promise of the same magnitude here.

A Carrier and Defense-Side Checklist

• Reserves. Re-evaluate open non-permanent-injury files where 90/180 was the only threshold theory, and disputed-liability files where the new fault bar may be dispositive.
• Claims handling. Build liability investigation to the front of the file. Preserve scene evidence, EDR/telemetry, and witness identity early, because fault now decides cases sooner.
• Threshold practice. Update IME and record-review instructions and threshold-motion templates to the remaining §5102(d) categories.
• Article 16. Plead and preserve the several-liability limitation for low-fault motor-vehicle insureds; press for verdict sheets that separate economic and non-economic damages.
• The cap. Plead the §5104(d) predicates with proof; do not assert it from labels.
• No-fault / SIU. Tighten late-denial and fraud-basis documentation under Part FF; expect litigation over “defense preservation.”
• Rate and compliance. Coordinate claims and actuarial so projected savings in filings are supportable, and keep “reform savings” talk out of adjuster negotiation scripts.

This is where the dual-practice perspective earns its keep. A carrier that understands how the plaintiff bar will rebuild these cases — better medical documentation, earlier liability proof, careful party joinder to manage the combined-fault comparison — will set reserves and litigation strategy more accurately than one reading only the affordability press release.

How We Help Carriers and Self-Insureds

The Law Office of Jason Tenenbaum, P.C. handles no-fault defense, coverage and claims disputes, and motor-vehicle litigation across Nassau, Suffolk, and the five boroughs, and advises on how the enacted reforms change threshold, fault, allocation, and no-fault denial strategy. For a consultation on positioning claims-handling protocols, threshold motions, Article 16 arguments, or SIU documentation under the new law, call (516) 750-0595 or contact the firm.

Frequently Asked Questions

Does New York’s 2026 auto tort reform reduce insurer claim exposure?

It reduces several inputs to claim severity. The deleted 90/180 category strengthens the threshold defense on non-permanent-injury claims, fault-first sequencing and the Article 51 mostly-at-fault bar make liability more decisive, and the CPLR §1602(6) repeal limits non-economic exposure for low-fault motor-vehicle defendants. Whether that translates into lower reserves and rates depends on carrier action and DFS review; the statute creates the opportunity, not the result.

What should carriers change in claims handling after the reform?

Move liability investigation to the front of the file, update IME and threshold-motion practice to the remaining serious-injury categories, plead and preserve Article 16 for low-fault motor-vehicle insureds, plead the §5104(d) cap predicates with proof, and tighten no-fault late-denial and fraud-basis documentation under Part FF. Re-examine reserves on files that depended on the 90/180 threshold or on disputed fault.

Does the CPLR §1602(6) repeal help fleet, rideshare, and municipal insurers?

Yes, and it is the most consequential change for commercial lines. Repealing the motor-vehicle exception to Article 16 lets a low-fault motor-vehicle defendant (50% or less at fault) limit its non-economic exposure to its equitable share, subject to the other Article 16 exceptions. It does not limit economic damages, so it is not a blanket proportional-liability rule.

What did DFS tell insurers at the NYIA conference?

DFS Acting Superintendent Kaitlin Asrow told insurers at the NYIA 2026 Annual Conference in Bolton Landing that reduced litigation and fraud costs should be projected into current rate filings now that the law is signed, with detailed guidance to follow. See our full analysis of the DFS remarks.

Can adjusters cite “reform savings” in settlement negotiations?

It is risky. Citing savings that have not yet been demonstrated, to justify lower offers, invites a bad-faith narrative from claimant counsel and does not match what the statute actually changed in any given file. Offers should track the specific threshold, fault, and allocation facts of the claim, not a general reform talking point.

Does Part FF change no-fault denial deadlines for carriers?

Part FF amends Insurance Law §5106(a) so that missing the 30-day pay-or-deny window does not automatically preclude a later denial or a defense to payment, and it changes certain fraud-reporting timing from 30 to 60 days. It is not a safe harbor — the defense will have to be earned on the record, and courts will define how far the new defense-preservation language reaches.

Will the reform lower New York auto insurance premiums?

That is the open question. The reform reduces claim-cost inputs and DFS has signaled it expects carriers to reflect that in filings, but rate relief depends on filings, DFS review, and market conditions. Out-of-state results from Michigan, Florida, and Louisiana are directional, not a guarantee of the same magnitude in New York.

Related Reading

• NY auto tort reform passed: the full statutory breakdown
• DFS told insurers what the reform really means (NYIA, Bolton Landing)
• New York no-fault insurance law — comprehensive guide
• No-fault insurance defense practice
• Long Island car accident lawyer

Primary Sources

• S9008-C / A10008-C, Part EE and Part FF
• Governor Hochul’s May 27, 2026 announcement
• Insurance Law §5102 · §5104 · §5106
• CPLR §1411 · §1602
• NYIA 2026 Annual Conference

This article is for informational purposes only and is not legal advice. The enacted statutory language and forthcoming DFS guidance will be interpreted by the courts; carriers should obtain case-specific advice.