NY Proposes Prior Approval for Every Auto Rate Increase

On September 9, 2026, Governor Hochul announced that the Department of Financial Services has proposed a regulation changing how private passenger auto insurance rates are filed in New York. Albany’s word for it is transparency. The plain version is that an insurer will need DFS to say yes before it raises your rate.

I am a personal injury lawyer in Huntington Station. My clients are drivers first and plaintiffs second, and since the spring nearly every one of them has asked me the same question: is my car insurance going down or not? This proposal does not answer that. It does change who decides when your rate goes up, and what you will be told when your bill moves.

Here is what was proposed, what it changes, and what to do with the renewal notice that lands on your kitchen table this winter.

What DFS actually proposed

The regulation implements the auto insurance reforms enacted in the FY2027 state budget. I covered the reforms themselves when they passed: the new 50 percent fault bar and the deletion of the 90/180-day serious injury category. This post is about the rate side of that same package.

Under current law, an insurer can implement up to two overall average private passenger auto rate increases without prior approval from DFS, as long as the cumulative effect of those increases stays within 5 percent. The industry calls that room the flex allowance. It let a carrier nudge rates upward, file the paperwork, and move on.

The proposed regulation closes that room for increases. Under it, an insurer must seek express prior approval from DFS before any upward change in private passenger auto rates. Not the third increase. Not the one that crosses 5 percent. Any increase.

Decreases are treated differently, and the difference is deliberate. A rate decrease that results from the FY2027 budget reforms can still be taken without prior approval. But the insurer must notify its policyholders about the decrease and explain why the change is happening.

Acting Superintendent Kaitlin Asrow put the purpose this way: “This regulation strengthens transparency for New York policyholders by ensuring that any increase in private passenger auto rates is subject to comprehensive and independent review.” The Governor’s line was broader: “New Yorkers deserve a transparent, fair and accountable auto insurance market that puts customers first.” Assemblymember David Weprin supported the proposal.

The regulation was published in the State Register on September 9, 2026, which started a 60-day public comment period. The law and the regulation take effect November 27, 2026.

What this means for a driver, in plain terms

Four things, none of them a promise.

Increases now need advance sign-off. An insurer that wants more money from you has to go to DFS first, with an actuarial justification, and wait for approval. That is a slower path than filing and using.

Decreases tied to the reforms still do not need approval, but they must be explained. If your carrier lowers a rate because of the budget reforms, it has to tell you it did so and why. That notice is new, and it is the part of this rule you will actually see.

The comment period is where the fight happens. The next 60 days are when consumer groups, insurers and lawyers tell DFS what the final rule should say. More on that below.

A prior approval regime tends to slow increases. It does not set rates. DFS reviewing every increase is a check on the process. It is not a guarantee that your premium falls, and I am not going to tell you it is. The rate-filing math behind the reforms is still working its way through the department, and I would not quote a savings number to anyone until a real renewal shows one.

One more thing worth separating out. Your premium is built from rating factors as well as the overall rate level. New York also changed the rules on which personal factors a carrier can use, and that is a different statute on a different clock. A renewal can move for either reason. Do not let one headline explain both.

What the comment period is for

A proposed regulation is not a final one. Publication in the State Register on September 9 opened a 60-day window in which anyone can tell DFS what works and what does not. Feedback can be submitted through the DFS website.

Insurers will use the window to argue about timing, about what counts as an upward change, and about how much detail a filing has to carry. Consumer advocates will push on the notice: what it has to say, when it has to arrive, whether it has to show the dollar effect on the individual policy rather than an average. Lawyers on my side of the aisle will watch whether the explanation requirement gives a driver enough to check the reform savings against the premium actually charged.

If you are a driver with an opinion about what your renewal notice should tell you, this is the moment to say it. I would rather see a rule that requires the notice to state what portion of a change is attributed to the reforms, in dollars, on the policy in your hand. Whether the final text goes that far will depend in part on who bothers to write in.

What to do as a driver

The other side of the ledger

Here is the part the press release does not say. The reforms that pay for this regulation were cuts to injured people’s rights. The new CPLR 1411(b) bars recovery for a motor vehicle plaintiff found more at fault than the defendant, and the 90/180-day category of serious injury is gone. Fewer claims, smaller claims, and in some cases no claim at all for a driver who would have recovered something a year ago.

The trade the state made was fewer claims in exchange for a promise of lower premiums. Newsday put a number on the promise in June: its report, “Long Island drivers could see insurance rates dip by 10% under new reforms,” carried the industry’s projection, and that is the figure the new decrease notices will let a driver test against a real renewal. DFS told the industry in May, at the New York Insurance Association’s annual conference, that it expected those savings to show up in filings; I wrote about what the department told insurers at the time. The notice requirement in this proposal is the mechanism by which an ordinary driver will be able to check whether the promise is kept. That is not nothing. It is also not a refund.

If you are in the group that gave something up, someone hurt in a crash where fault is contested, the Long Island car accident practice page explains how the fault bar is being argued and what still gets a case past it.

FAQ

Is my New York car insurance going down? Nobody can tell you that from this regulation. It does not set rates. What it does is require DFS approval before any increase, and a written explanation to you when a carrier takes a reform-related decrease. Whether your own premium falls depends on your carrier’s filing and your policy. Read the renewal.

What does “prior approval” mean? The insurer must submit its proposed increase to DFS, with the actuarial justification for it, and receive express approval before charging the new rate. Under the current flex allowance, a carrier could implement up to two overall average increases with a cumulative effect within 5 percent without that step.

What was flex rating? A system that let an insurer file and use small overall rate changes without waiting for DFS to sign off, as long as the cumulative effect stayed inside a set band. For private passenger auto increases, the proposed regulation ends it.

When does the new rule take effect? The law and the regulation take effect November 27, 2026. The proposed regulation was published in the State Register on September 9, 2026, which started a 60-day public comment period, so the final text could still change before then.

Can I comment on the regulation? Yes. Feedback can be submitted through the DFS website during the 60-day comment period that began September 9, 2026. Insurers and consumer groups will be filing comments; individual drivers can too.

Does this change my claim if I was in a crash? No. This regulation is about how insurers file rates. The changes that affect a crash claim, the 50 percent fault bar under CPLR 1411(b) and the deletion of the 90/180-day serious injury category, came from the same budget but are already in force. If an adjuster is citing the new fault rule against you, get advice before you answer.

Sources

• New York Governor’s Office and Department of Financial Services, Governor Hochul Announces Proposed Regulation Requiring Prior Approval for Private Passenger Auto Insurance Rate Increases (Sept. 9, 2026): https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20260909
• New York Insurance Law § 2350 (flexible rating for nonbusiness motor vehicle insurance): https://www.nysenate.gov/legislation/laws/ISC/2350
• Newsday, June 2, 2026 (Brianne Ledda), Long Island drivers could see insurance rates dip by 10% under new reforms: https://www.newsday.com/business/auto-insurance-reforms-gov-kathy-hochul-lo5ig55z

---

The state took something from injured drivers in May and promised the rest of us a lower bill in return. This regulation does not deliver the bill. It makes the insurer show its work before raising your rate, and explain itself when it lowers it. Hold onto the notice.

Call 516-750-0595 or request a free case review if you were hurt in a crash and the insurer is using the new fault rule to deny or shrink your claim.