What happened: New York’s insurance market for ride-share drivers is collapsing amid litigation abuse, particularly due to fraudulent claims under the state’s “no-fault” law.

How it works: New York’s no-fault law requires insurers to pay for medical expenses and property damage, regardless of who caused the accident. “If a bicyclist gets hit by a taxi after the cyclist blows through a red light, the taxi driver’s insurance must pay for the resulting costs.”

• Plaintiff attorneys exploit this by recruiting injured clients and partnering with dishonest doctors to file exaggerated medical claims. 
• When insurers challenge these claims, plaintiff attorneys often file lawsuits. Rather than risk enormous jury verdicts, insurers typically decide to settle even meritless claims, which drives up costs across the board.

Sound familiar? While Texas doesn’t have a no-fault law, no-fault has unofficially become the default in many personal injury cases in Texas courts. 

• Remember Werner? was hit with a nearly $90 million nuclear verdict after a pickup truck lost control and crossed a median, hitting Werner’s truck head on.
• The DPS officer at the scene said Werner did nothing wrong and the accident was unavoidable, but that didn’t stop the lawsuit and the massive judgment holding Werner liable for tens of millions in damages.

TLR Thoughts: The collapse of New York’s rideshare and cab insurance market is a warning for Texas, which is facing its own nuclear verdict crisis. As these unjustified verdicts continue to rise, Texas job creators are at risk of being left unable to access the insurance coverage they need to operate, or being driven out of business altogether. 

• The Lone Star Economic Alliance is a critical effort to protect Texas businesses from these harmful litigation practices. Without action, Texas could face a similar economic disaster as New York, with jobs and industries being driven out of the state by abusive lawsuits.

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