New York auto insurers must document projected reform savings by Aug. 31

New York auto insurers with pending rate filings must account for projected savings from the state’s 2026 insurance reforms by Aug. 31, a regulatory deadline that could affect future premiums but does not automatically reduce what every driver pays.

The Department of Financial Services issued Insurance Circular Letter No. 3 on July 1. It directs insurers authorized to write motor-vehicle insurance in New York, the New York Automobile Insurance Plan and rate-service organizations to reflect the reforms in pending and future motor-vehicle rate filings.

What insurers must submit

Insurers with pending motor-vehicle rate filings must amend those submissions by Aug. 31, 2026. They must also account for the reforms in future filings submitted to DFS.

The department updated its rate-filing checklist and instructions to include a new Exhibit TR-1 Automobile Tort Reform Calculation. Insurers must complete the exhibit for pending and future motor-vehicle rate filings.

The exhibit requires insurers to estimate the percentage decrease in anticipated claims and loss-adjustment expenses resulting from portions of the reforms. They also must provide a complete explanation of the calculations, actuarial processes, methodologies and assumptions used to reach those estimates.

DFS expects insurers to evaluate projected changes in claim frequency, claim severity, loss-adjustment expenses and other actuarially indicated costs. The department has not set one uniform savings percentage for all companies or policyholders.

Why the deadline does not mean an immediate discount

Aug. 31 is primarily an insurer filing and documentation deadline. It is not a date by which every New York driver will receive a refund or a guaranteed percentage reduction.

Any effect on premiums will depend on an insurer’s actuarial analysis, the rate filing submitted to DFS, the department’s review and approval, and the timing of a customer’s renewal. Policyholders may see different results based on their insurer, coverage, rating factors and renewal date.

PIA Northeast reported that the circular gives carriers a framework for estimating the reforms’ effects. The industry publication also noted that projected savings may take time to work through rate filings and actual claims costs.

What changed in state law

The reforms were enacted through Chapters 55 and 58 of the 2026 Laws. Chapter 55 was signed May 27, 2026, and Chapter 58 was signed May 26, 2026.

One provision expands New York’s definition of a fraudulent insurance act to include a person who hires, requests, encourages, orchestrates or invites another person to stage a motor-vehicle accident.

Other provisions revise the serious-injury definition and the order in which fault and serious injury are determined in certain lawsuits. The law also adopts a modified comparative-negligence rule for personal-injury actions subject to Insurance Law Article 51. In those cases, a claimant’s culpable conduct bars recovery when it is greater than the culpable conduct of the opposing party or parties.

A separate provision places a $100,000 cap on non-economic damages in certain serious-injury actions brought by or on behalf of an at-fault injured person who is not otherwise barred from recovery and who was operating an uninsured vehicle, operating while impaired and convicted of that offense, or committing a felony and convicted of it. The cap does not apply to an action for injuries resulting in death.

DFS says the changes are expected to deter fraudulent and inflated claims, moderate claim frequency and severity, and lower loss-adjustment expenses. Those are projected effects that insurers must evaluate and support in their filings, not savings already approved for individual customers.

Another rate-filing change begins Nov. 27

Beginning Nov. 27, 2026, insurers will need prior DFS approval before implementing overall average rate-level increases of up to 5% for nonbusiness motor-vehicle insurance, including private-passenger automobile coverage. Overall average rate-level decreases of up to 5% may still proceed without prior approval.

Rate filings submitted before Nov. 27 remain subject to the current flex-rating provisions. The change therefore applies prospectively and does not retroactively alter filings submitted under the earlier system.

What drivers should watch

Drivers should review renewal notices for the approved rate, effective date and any explanation of a premium change. They can also ask their insurer or agent whether a renewal reflects a rate filing updated for the 2026 reforms.

The key dates are Aug. 31, when pending filings must include the required reform calculations, and Nov. 27, when prior approval will be required for qualifying overall average rate increases. The size and timing of any consumer savings remain dependent on actuarial estimates, DFS review, approved rates and future renewals.

Sources

• Insurance Circular Letter No. 3 (2026): Motor Vehicle Insurance Reforms
• N.Y.: DFS issues new guidance on state’s 2026 auto insurance reforms

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