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Mayor Adams Signs Law Reducing Insurance Requirement for NYC For-Hire Drivers

New York City Mayor Eric Adams has officially enacted legislation that lowers the minimum auto insurance coverage for for-hire vehicle drivers, including those working with Uber, Lyft, yellow cabs, and livery services.

Under the new law, the amount of personal injury protection (PIP), also known as no-fault insurance, required by the city will drop from $200,000 to $100,000 per individual. Previously, NYC drivers were required to carry four times the amount mandated for similar drivers across the rest of New York State, where the minimum is $50,000 per person.

The legislation passed the City Council with overwhelming support—50 members in favor and just one abstaining.

Citizens for Affordable Rates (CAR), a coalition supported by Uber, praised the move. The group argues that this adjustment will relieve financial stress on many drivers—most of whom are immigrants and small business operators—by potentially reducing insurance premiums, discouraging fraudulent claims, and opening the door for new insurance providers to enter the city market.

CAR cites a report from the New York State Department of Financial Services indicating that suspected no-fault fraud made up 75% of all fraud reports the agency received in 2023. The organization believes that the previous $200,000 insurance mandate played a role in fueling that trend.

“For years, for-hire drivers in New York City have shouldered the weight of an excessive and outdated insurance rule that raised costs, limited choice, and incentivized fraud. That’s finally changing,” said Council Member Carmen De La Rosa, who sponsored the bill.

The new law also bars the city’s Taxi and Limousine Commission (TLC) from requiring TLC-licensed vehicles to maintain no-fault insurance coverage greater than double the statewide minimum.

“Drivers licensed by the TLC are the backbone of our city’s transportation network,” said Mayor Adams. “Most of these hardworking New Yorkers are immigrants striving for a better life, yet they’ve been forced to pay exorbitant insurance rates that strain their finances. This law eases that burden.”

This legislative update comes as concern grows over the financial instability of American Transit Insurance Co. (ATIC), which currently insures over 60% of the city’s for-hire vehicles. Lawmakers and industry advocates hope the change will stabilize the insurance market and attract additional providers to ensure consistent coverage.

While the original goal was to lower the insurance requirement to $50,000 to fully match state levels—potentially saving drivers $600 annually—the compromise at $100,000 is expected to result in savings of approximately $300 per year.

Still, some city officials remain cautious. TLC Chair David Do expressed skepticism during a February City Council hearing, stating, “It is uncertain whether drivers will actually see reduced premiums, as insurers may choose to keep the savings instead of passing them on.”

The new city law is part of a wider effort by Uber and CAR to reform insurance practices in New York City and statewide. The coalition has been lobbying lawmakers in Albany to crack down on no-fault fraud and limit excessive litigation, while investing heavily in advertising to support their legislative push.

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