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Report: New York has nations highest insurance costs

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(The Center Square) — New York State has the highest insurance costs in the country, according to a new report, which says the rates charged for auto, health and other premiums are putting the squeeze on consumer’s wallets.

The report by the New York Civil Justice Institute, released Thursday, found that New York tops the nation with the highest auto insurance premiums, averaging $4,769 annually for full coverage. Those costs represent more than 13% of the state’s median individual income, which the report’s authors said creates a “substantial financial burden on residents.”

The report also took a deep dive into the factors contributing to the soaring insurance costs, saying they “significantly impact affordability and availability” for consumers and businesses that operate in the state.

“While inflation, medical costs, and cost of living increases are impacting every region, New York’s insurance costs are persistently and consistently higher relative to other states, the report’s authors wrote. “Consumer-facing insurance professionals are deeply concerned about the market’s stability.”

Consumer health insurance is higher in New York than in any other state – an average of $8,936 per household, the report noted. The report found that New York tops the charts in health insurance costs, with premiums for families averaging $23,450 annually — more than 30% of the median U.S. household income.

New York hospitals and doctors experience the highest medical liability costs in the nation, with 2022 lawsuit payouts totaling $434 million. For some specialty providers, like OBGYNs, medical professional liability premiums are among the highest in the nation. Sky high payouts and premiums have long-term implications for the cost of healthcare throughout the state, the report’s authors wrote.

Representing 12.5% of project costs, construction insurance in New York is significantly higher than in neighboring states, where it averages around 2.5%, according to the report.

Meanwhile, a New York City law requires ride-share drivers to maintain $200,000 in no-fault, personal injury protection coverage — a rate that is four times the minimum coverage required in the rest of the state. That’s in addition to general auto coverage, the report noted.

The report authors attributed the high insurance costs to several factors, including state laws that incentivize lawsuits and mandate extensive coverage as well as New York’s “notoriously litigious” environment.

Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, said the report’s findings should be “a call to action for policymakers at every level of government.”

“While some factors require further study, there are numerous opportunities for lawmakers to address the root causes of out-of-control insurance costs and the swift deterioration of the insurance market,” he said in a statement. “It is long overdue for our elected leaders to consider reforms that could alleviate the financial pressure on New Yorkers and their wallets.”