Uber Technologies Inc. secured a legal victory as a US judge ruled that American Transit Insurance Co. (ATIC) breached its duty to defend the ride-hailing giant in 23 crash-related lawsuits. The court ordered ATIC to cover $23 million in damages and legal fees, following its failure to honor insurance policies for Uber drivers involved in bodily injury claims. US District Judge Analisa Torres emphasized ATIC’s culpability, stating the insurer’s insolvency stemmed from decades of underpriced policies that left it unable to meet obligations.

ATIC, which held 60% of NYC’s taxi insurance market, collapsed under financial strain due to persistently low premiums. This shortfall forced Uber to absorb costs independently, a situation Judge Torres called a “systemic failure” in the city’s for-hire vehicle insurance framework. The ruling exacerbates industry-wide concerns, as regulators warn of potential rate hikes to stabilize the market.

Uber’s legal team highlighted the decision as a step toward accountability but noted broader systemic issues, including staged-crash fraud and predatory lawsuits. The company has lobbied for reforms, including Governor Kathy Hochul’s proposed 25% insurance rate increases and anti-fraud measures. Additionally, Uber is pursuing racketeering lawsuits in multiple states against entities allegedly exploiting insurance payouts.

The case underscores vulnerabilities in New York’s insurance ecosystem, with ATIC’s collapse threatening transit stability. Experts argue the ruling may set precedents for insurer accountability nationwide, while Uber’s ongoing legal battles highlight the need for regulatory overhaul to prevent future crises.