New York State has now implemented significant changes impacting liability for motor vehicle accidents. The act, part of NYS Governor Kathy Hochul’s FY 2027 Enacted Budget, passed both chambers of the legislature on May 26, 2026, and was signed into law by Governor Hochul on the same day.
Governor Hochul originally proposed these reforms as cost-saving measures for NYS policyholders and consumers. After lengthy negotiations over the proposed reforms, lawmakers reached a deal and enacted key changes to auto liability claims. The act notably:
- Removes the “90/180” category of “serious injury,” as defined under Insurance Law 5102(d), meaning claimants can no longer satisfy the serious injury threshold by demonstrating that an “injury or impairment of a non-permanent nature” prevented them from “performing substantially all of the material acts [constituting their] usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following [an accident]”;
- Clarifies that “serious injury” is a component of liability, meaning that interest does not accrue until there are findings as to both negligence and “serious injury”;
- Limits a personal injury claimant’s potential recovery for non-economic loss to $100,000 if the claimant bears fault for the accident and:
- was operating an uninsured vehicle that was required to be insured (unless the lapse in coverage was for less than 30 days);
- was operating a motor vehicle while impaired, and was convicted of such; or
- was operating a motor vehicle in the course of committing a felony, or fleeing from same, and was convicted of such.
- Implements a new modified comparative negligence standard, replacing the prior pure comparative negligence standard
- Under the new standard, a claimant is barred from recovery if the claimant’s share of fault is greater than the culpable conduct of the tortfeasor (or the combined culpable conduct of multiple tortfeasors).
The act also imposes more stringent oversight on auto insurers, including requiring approval from the Department of Financial Services for rate increases and limiting the factors that can be considered when increasing a policyholder’s auto premiums.
While actions pending prior to May 26, 2026, are not subject to these changes, the act takes effect immediately and is applicable to any suit filed on or after May 26, 2026.
It is yet to be determined how some of these changes will be interpreted and applied, particularly with respect to complex motor vehicle accidents involving multiple claimants, tortfeasors, or both.
If you have any questions regarding the content of this alert, please contact Jessica Tariq, counsel, at jtariq@barclaydamon.com; Matthew Larkin, Torts & Products Liability Defense Practice Area chair, at mlarkin@barclaydamon.com; or another member of the firm’s Torts & Products Liability Defense Practice Area.