NEW YORK – Council Member Carmen de la Rosa (D-Manhattan, District 10) introduced a major new bill to reduce the excessive, costly insurance coverage requirements for struggling Taxi and Limousine Commission (TLC) drivers in New York City. This much-needed reform will reduce the Personal Injury Protection (PIP) coverage requirement for TLC drivers, aligning it with the coverage standards set for Transportation Network Company (TNC) drivers and personal vehicle drivers across New York State.
Currently, for-hire drivers in New York City are required to maintain $200,000 in PIP insurance coverage per person—four times the $50,000 requirement for similar drivers throughout the rest of the state. This disparity places an unnecessary financial burden on for-hire drivers in New York City, while also fostering an environment where insurance fraud is incentivized by the higher coverage limit.
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The legislation comes at a critical time for the industry as the largest insurer of taxis and Ubers in the city, American Transit Insurance Company, faces collapse, threatening the jobs of 74,000 drivers (more than 60 percent of the city’s fleet). By lowering insurance requirements, this bill will also help avert the fallout from ATIC’s insolvency.
Council Member Carmen De La Rosa, Chair of the Committee on Civil Service and Labor at the New York City Council said, “This bill addresses an urgent problem facing our city’s hardworking for-hire drivers. By reducing the insurance requirement from $200,000 to $50,000, we are creating an equal standard across New York State, reducing drivers’ out-of-pocket costs, and making the insurance market more accessible to additional carriers. This will be a major breakthrough to help for-hire drivers, root out fraud, and stabilize the insurance market in an industry that has sustained New York’s working-families for generations.”
Key benefits of the bill include:
Lower Insurance Costs: Bringing the PIP coverage requirement down to $50,000 will significantly reduce insurance costs for all TLC drivers, who are already facing high commercial auto premiums. It will also pass along savings to consumers.
Fraud Reduction: The current high PIP limits have fostered an environment for fraudulent claims, as fraudsters target the higher insurance payouts available under NYC’s $200,000
coverage limit. According to a report released by the New York State Department of Financial Services, suspected no-fault fraud reports accounted for 75% of all fraud reports the department received in 2023. Lowering the limit will help curb these abuses, benefiting both insurers and drivers.
Increased Market Competition: Reducing the PIP threshold will make the NYC market more attractive to insurance carriers, increasing competition and providing more options for drivers.
New York City drivers of for-hire vehicles, including Uber, Lyft, yellow taxi, and livery, are already covered by additional benefits through the Black Car Fund or Workers’ Compensation for yellow taxi drivers, which further diminishes the need for such a high PIP requirement. These benefits, which include coverage for medical expenses, lost wages, and death benefits, also overlap significantly with PIP coverage, making the current $200,000 threshold redundant and unnecessary.
The bill also comes at a critical time, as the number of insurance carriers offering commercial auto insurance in NYC has dwindled, with the largest provider facing financial instability.
“We must act now to protect drivers and ensure they can afford the insurance coverage they need without being weighed down by excessive costs. This is a big step towards tackling the affordability crisis head on,” added Council Member De La Rosa.
The bill is expected to receive widespread support from driver advocates, industry stakeholders, and fellow Council Members. A copy of the bill is available here.
