Freight services and last mile delivery power New York’s economy. From groceries and medical supplies to your latest internet purchase, nearly every product that reaches a store shelf, a clinic, or arrives at your front door has spent time on a truck. The trucking industry is the glue that holds the Empire State economy as well as the healthcare system together — so when trucking becomes more expensive, the cost of everything else rises too.
That’s why Gov. Kathy Hochul’s new plan to make auto insurance more affordable is so important. Her proposals would tackle fraudulent claims and fix New York’s flawed liability system in an effort to make insurance less expensive. If enacted, these reforms would deliver real relief to the businesses that keep our supply chains moving. And that, by extension, will increase affordability across the broader economy.
New York’s freight system moves about 743 million tons of product each year, valued at an eye-watering $1.3 trillion. Trucks account for over 96 percent of that haul. Commercial trucking companies log millions of miles on the road annually, delivering goods around the clock.
Last-mile delivery is also a vital, lifesaving link in the healthcare supply chain. Every day, professional drivers and specialized couriers transport medical equipment, laboratory specimens, chemotherapy, and temperature-sensitive medications to hospitals, laboratories, pharmacies, and directly to patients’ homes.
Like all transportation businesses, freight and delivery companies must carry substantial insurance coverage to operate — and in New York, that presents unique challenges.
New Yorkers pay some of the highest costs for auto insurance in the nation. For individuals, the average is around $4,000 per year, about $1,500 more than the national average. But for commercial trucks, the price is substantially more. Trucking companies can expect to pay, on average, nearly $17,000 per vehicle.
So, why are costs in the Empire State so high? Fraud, unfortunately, plays a role, with staged accidents a particularly pervasive problem on the densely-packed New York roads. Fraudulent claims clog up the insurance pipeline and drain resources from the system, raising costs for everyone else. But there’s a bigger, structural reason why New Yorkers pay so much for coverage: the state’s liability system encourages profiteering and excessive litigation, driving up insurance costs far beyond what they otherwise would be.
New York is one of only a few places in the nation that allows drivers found mostly at fault for a crash to file a lawsuit to recover significant damages. This factor, coupled with our state’s vague legal standards about what qualifies as a “serious injury,” invites claimants with otherwise dubious cases to pursue a potential payout. As a result, lawsuits abound in New York, ratcheting up the risk of operating a vehicle in the state, and naturally, raising the price folks pay for insurance.
For trucking companies — many of which are small, family-owned businesses operating on tight margins — those costs add up. They increase monthly expenses, affect hiring decisions, reduce equipment purchases, and limit growth opportunities. Worse, those costs ripple out to the broader economy and healthcare system as businesses raise prices to cover the difference. When it costs more to transport groceries to the store, the cost to consumers increases. Ultimately, everyday New Yorkers are left paying more.
But the good news is that Gov. Hochul recognizes the dangers posed by high auto insurance costs and is taking proactive steps to address them. By tightening the definition of “serious injury” to rely on objective medical standards and limiting payouts when a driver is primarily at fault, the Governor is restoring balance to a system that has tilted too far toward excessive litigation. For the trucking industry, these reforms would provide much-needed financial relief, reducing insurance costs and allowing these businesses to focus on what they do best: keeping New York supplied.
If Albany is serious about improving affordability throughout the state, supporting the Governor’s plan would be a good place to start. When we make it less expensive to keep our wheels turning, we make it more affordable to live and do business across New York.
Kendra Hems is the president of the Trucking Association of New York. Larry Zogby is the CEO of RDS Same Day Delivery.
