By PHIL ANDREWS //
Skyrocketing insurance costs are putting real pressure on small businesses across New York State, especially women- and minority-owned businesses that already have less room to absorb new expenses.
Luckily, Gov. Kathy Hochul is taking direct aim at the fraud and lawsuit abuses that keep pushing premiums higher.
Right now, bad actors and aggressive attorneys exploit our insurance system by staging accidents, filing exaggerated claims and gaming the civil justice system to maximize payouts. While fraudsters and billboard lawyers profit, honest New Yorkers are left paying higher premiums – and small businesses are forced to make painful tradeoffs just to stay afloat.
Trucking companies, contractors and restaurants all rely on insured vehicles to properly operate and keep the economy moving. However, annual auto premiums have climbed to nearly $5,000 on Long Island, forcing business owners to make difficult decisions such as raising prices, reducing staff, cutting off delivery services or shutting down entirely.
Phil Andrews: Focused on fraud.
New York’s no-fault insurance system was originally designed to help people avoid lengthy legal battles and quickly pay for medical expenses and vehicle repairs. But today, that same system is routinely exploited through staged crashes, inflated injury claims and unnecessary lawsuits that allow attorneys and bad actors to extract as much money as possible from each incident – real or fabricated.
Recent investigations show just how far this abuse has gone. In Freeport, a network of scammers – including lawyers and medical providers – allegedly filed more than 70 lawsuits tied to staged accidents and false diagnoses. Fraudsters exploit the no-fault system, which allows them to secure payouts even though they caused the accident.
Fraud rings often target commercial vehicles, putting small businesses squarely in their crosshairs. The cost of these scams is then paid by honest drivers, employers and consumers through higher premiums and higher prices for goods and services.
For historically marginalized communities, these rising costs hit especially hard. Women- and minority-owned shops already face greater barriers to accessing capital and getting off the ground. When insurance costs spike – by as much as 80 percent on Long Island since 2019 – those barriers grow even higher, discouraging entrepreneurship among young women and our Black and Brown neighbors and making it harder for all local businesses to survive and grow.
Rising insurance costs also threaten the workforce. A vast majority of Long Island residents drive to work, and as the cost of car ownership climbs, fewer workers can afford reliable transportation, making it harder for businesses to recruit and retain employees.
Pain in the rear: It’s a common scam — they cut you off and jam their brakes, you rear-end them and your wallet takes the hit.
Small businesses make up an overwhelming majority of New York’s enterprises. And for those businesses – nearly 40 percent women-owned and 27 percent minority-owned – dependable staff is essential.
New York’s laws make it far too easy to game the system, inviting fraud and opportunistic lawsuits that raise costs for everyone else. Hochul’s proposed reforms put everyday New Yorkers first and restore fairness and accountability.
Other states have taken similar steps, which are bringing much-needed relief to local communities as the overall cost of living continues to soar. For instance, Florida drivers are receiving rate reductions up to 20 percent. For small-business owners, savings like that can mean the difference between growth and closure.
New Yorkers shouldn’t be forced to bankroll a system that rewards fraud and manipulates the civil justice system while making everything more expensive for families and small businesses. The choice for lawmakers is simple: Either protect a broken status quo that benefits a small group of wealthy trial lawyers, or fix the system so Long Island remains competitive, local entrepreneurs can reinvest in their communities and working New Yorkers have access to economic and educational opportunities.
Supporting the governor’s reforms would send a clear signal that the representatives we send to Albany are serious about affordability, fairness and supporting our communities here on Long Island and throughout the state.
Phil Andrews is president of the Long Island African American Chamber of Commerce.
