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New York’s 2026 budget proposes Insurance Reforms for for-hire vehicles

New York’s 2026 budget proposes Insurance Reforms for for-hire vehicles

New York’s 2026 fiscal year budget includes proposed legislative changes aimed at improving insurance coverage for for-hire vehicles, according to BestWire. The measures introduce new regulations on rate requests and modify the definition of “for-hire motor vehicle.”

These proposals follow the financial collapse of New York City’s largest taxi insurer, which reported insolvency of approximately $655 mn due to widespread insurance fraud and rising costs

Under the budget’s provisions, insurers could bypass the approval process for rate increases of 5% or less, though they would be limited to two increases within any 12-month period. The plan also removes the requirement that all rate changes receive approval from the Department of Financial Services superintendent.

However, adjustments would only take effect at the start of a new policy period, and total increases must remain within regulatory limits.

Additionally, the budget removes the eight-passenger seating requirement from the definition of “for-hire vehicle,” while keeping exceptions for buses and school transportation. These changes would take effect 180 days after the budget’s approval.

Beyond the budget, the New York City Council is considering reducing personal injury coverage requirements for taxis and other licensed vehicles from $200,000 to $50,000.

Council Member Carmen De La Rosa, representing District 10, noted this would align their coverage requirements with those of other New York drivers, who must carry $50,000 in personal injury protection.

ATIC’s solvency issues could threaten drivers’ livelihoods, as about 60% of taxis and limousines rely on the company for coverage, De La Rosa said. The situation may also put pressure on other insurers in the sector.

Addressing this requires strong collaboration between state and city officials, along with industry stakeholders, to develop a structured plan that protects drivers and limits future cost increases

Council Member Carmen De La Rosa

De La Rosa added that the governor’s budget amendments aim to regulate these challenges through the Department of Financial Services superintendent in the FY26 plan.