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New York City Mayor Eric Adams has signed into law legislation reducing the auto insurance liability coverage that for-hire vehicles must carry.

The new law reduces the amount of personal injury protection (PIP), or no-fault, insurance coverage that the city’s 74,000 Uber, Lyft, yellow taxi, and livery drivers have to buy from the current $200,000 to $100,000 per person.

The $200,000 in PIP coverage that drivers in New York City have been required to maintain is four times the $50,000 per person requirement for similar drivers throughout the rest of the state.

The City Council backed the measure 50-0 (with one abstention).

Citizens for Affordable Rates (CAR), a group backed by Uber, hailed the change that it says will ease the financial pressure on drivers – many of whom are immigrants and small-business owners. Supporters of the change hope it will help lower premiums, disincentivize fraud and attract new insurers to the city’s for-hire insurance market.

The group contends that the previous higher $200,000 mandate fueled litigation and fraudulent claims, citing a report by the New York State Department of Financial Services that suspected no-fault insurance fraud reports accounted for 75% of all fraud reports the department received in 2023.

NYC Council Passes Bill to Lower Insurance Limits for For-Hire Vehicles

“For years, New York City’s for-hire drivers have been burdened by an unjust, outdated insurance mandate that inflated costs, limited their options, and encouraged widespread fraud. Those days are coming to an end,” said Council Member Carmen De La Rosa, the lead sponsor of the bill.

The measure signed by Adams prohibits the Taxi and Limousine Commission (TLC) from requiring the vehicles it licenses to have PIP liability coverage in an amount greater than 200% of the amount required by state law for drivers elsewhere in the state.

“TLC-licensed drivers keep our city moving,” said Adams. “Many of these working-class New Yorkers are immigrants trying to build a better life here in the Big Apple, but for too long, our TLC-Licensed drivers have had to pay higher rates for no fault or personal injury insurance for their vehicles, burdening drivers and owners with thousands of dollars in costs and putting pressure on their monthly bills.”

The signing comes amid concerns over the potential collapse of American Transit Insurance Co. (ATIC), which insures more than 60% of the city’s for-hire vehicle fleet. De La Rosa and advocates believe the change could encourage new carriers to enter the market, while also providing a safeguard for drivers facing uncertainty about future coverage.

Supporters had hoped to lower the for-hire drivers’ limit from $200,000 to $50,000 per person, which would align with the state’s requirement for all other drivers. That would have saved drivers about $600 a year, according to De La Rosa. Instead, the savings might be more like $300 a year with the $100,000 limit.

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The head of the city’s TLC isn’t convinced drivers will benefit. “It is not clear premiums would go down as any savings may be kept by insurers and not passed to drivers,” TLC Chair David Do told the City Council’s transportation committee during a February hearing.

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The city’s measure is one element of a broader campaign by Uber and CAIR to address the high cost of insurance in the city and across the state. CAIR is advocating for reforms targeting no-fault insurance fraud and unnecessary litigation. The group has run a media campaign calling on lawmakers in Albany to act.