The big idea: an insurance policy for your fare evasion fines

You will go to jail if you try this, but it's interesting to think about

If you visit New York City you will see a LOT of people not paying their subway and bus fares. I’ve never done it, but it doesn’t seem to require much athleticism to get over the turnstile. On the bus, people tap their credit card on a screen - it seems pretty easy to just pretend.

With that context, I saw the penalties for fare evasion changed in 2025:

• First time: a warning

• Second time: $100, with a $50 fare card rebate

• Third onwards: $150 for each additional violation

It hit me that it’s probably economically rational to evade your fare based on these fines. Looking at the MTA’s data, there are ~26.6 million rides per week across the subway and bus networks. How many evasion tickets are they really giving out? Other New Yorkers seem to have had the same thought - fare evasion is all over the news.

It got me thinking: what if we could pool the individual risk of evading your fare? Something like fare evasion insurance - you pay a monthly fee, and if you do get a fine you’re reimbursed from the pool.

This actually sort of exists

Groups in France and Sweden have set up this type of insurance as part of a political movement in favor of no-fee public transportation. Their insurance is typically in the range of $10 per month to cover a ticket that’s typically $120 per offense. It’s pretty brazen - you can sign up on their website right now.

What are your actual odds of getting a ticket?

Lower than you’d expect! Let’s dig into the math of subway enforcement:

According to the MTA, there were 1.19 billion subway rides taken in 2024. They very helpfully created a Blue Ribbon Report on fare evasion, which estimated that 14% of subway fares are evaded.

That gives us 167 million evaded fares on the subway per year. That’s a TON of fare evasion - I can see why the MTA wants to crack down on it! It’s even worse for buses - 48% of fares are evaded, adding another 196 million no-fare rides to the total.

Unfortunately, the NYPD only reports citations for subway fare evasions¹, so let’s focus there:

Based on this data, about 1 in 1,140 evaded subway rides are caught. For somebody doing 480 rides a year, your chances of getting a citation are:

In the end, your expected annual cost from fines is approximately $4.88, an expected annual savings of $1,387 from fare evasion (or $115.59 per month).

Of course, enforcement isn’t equally distributed - Gothamist reports that some stations have as many as 60 citations per 100,000 riders, while others have virtually zero enforcement on fare evasion. So let’s look at high enforcement stations:

That’s an annualized expected cost of ~$116.49 - nearly 24x higher than the full system. Your chance of getting caught each time is a higher 1 in 233, but the math still implies an annual evasion savings of $1,275.

So with that info, is there a market for fare insurance?

Probably! It sucks to get a ticket! An unexpected $150 payment is significant for lots of people; I’d imagine that most evaders aren’t putting their $2.90 fare into a savings account to self-insure. To protect against the downside risk, it actually might be reasonable for somebody to buy an insurance product - if the price is right.

Let’s clear this up early - is this legal?

I am not a lawyer, but I don’t think so. Google search tells me that in New York State “By definition, insurance contracts in New York, generally, may not be written to insure a person for that persons intentional criminal acts.” This seems pretty cut and dry - I don’t think you can legally set this up in New York (or probably anywhere).

But let’s take it seriously: how would you charge for this?

Well, we probably can’t charge based on which stations your customers are using - I don’t think it’s wise to keep data on exactly who’s dodging fares and where. So let’s assume that all of our customers have an annualized average cost similar to the high-enforcement stations - $116.49 on average per year.

I looked up Progressive’s 10-k, and it looks like they pay out about 45 billion in claims against 58 billion in premiums - roughly a 77.8% payout ratio. $116.49/.778 = $149.73 in annual premium.

$149.73 per year implies a monthly cost of $12.48. I find it very hard to imagine you could charge almost as much as you’d pay for your third ticket as a lump sum, so you’re probably collecting monthly.

But collecting monthly adds risk: fare evasion enforcement tends to go in waves, and a series of early sweeps could drain the premium pool. Real insurance companies would use reinsurance to handle this². Maybe you could partner with similar fare evasion pools in Chicago, San Francisco, and LA?

I think however illegal this is to do in New York, running a conspiracy across multiple states to facilitate a crime is more illegal. And even if you did, New York makes up ~75% of all subway trips in the country! If New York enforces first, it’s over.

There’s also all the standard insurance challenges

Maybe you’ve been screaming the whole time: doesn’t adverse selection³ blow this up? Yes! There probably are specific people who get caught all of the time that are more likely to buy this - enforcement doesn’t happen randomly!

Beyond that, we’re creating a big moral hazard:⁴ buyers will feel invulnerable to tickets. A normal fare evader might at least check if the NYPD is around; a fully insured evader could be brazen, racking up excess tickets.

Auto insurers often do some kind of safe driving program where your rate adjusts based on how many accidents you get into. Will people immediately cancel if you raise their rate after the third time?

With all of that: what are the economics?

Let’s assume the subway evader rate is the same as the evasion rate and that the 45% of New Yorkers who own a car aren’t taking the subway. That means:

• Out of 8.25 million New Yorkers⁵, 4.5 million take the subway and 635,000 evaders may be interested in this service

• At 5% penetration, that’s $4.7M in premiums per year

• With an estimated income after payouts of ~$1,055,787.41

That sounds pretty good, but:

How would you administer the program? The population of insurance analysts willing to work on black market insurance is probably fairly low. And reaching riders to sign up is a massive challenge - they’re not going to let you advertise on the subway!

And most of all, (I am not a lawyer) you are going to go to jail if you do this! Your million dollars will be eaten up in legal fees, bail costs for your employees, and all of the assets the FBI will seize. Don’t do this!

The government would probably react to this too

If some brave soul did take this idea seriously, I think New York’s government would respond with a series of carrots and sticks:

The carrots:

For many New Yorkers, hopping the turnstile isn't malicious - $2.90 adds up quickly when you're living paycheck to paycheck.

The MTA can do more. Reduced fare cards only make up 10.5% of rides, while 23.6% of New Yorkers appear to be eligible⁶. There’s talk of expanding the Fair Fares program, but by my math it only seems to reach a quarter of qualifying low-income residents today⁷. It seems pretty clear that these programs aren’t serving everybody that they should.

Maybe the uproar around fare evasion insurance would spark much-needed investment into getting people enrolled.

The stick:

According to this lawyer with good SEO, technically you can be sentenced to up to a year in prison for jumping the turnstile. As far as I can tell, nobody has ever gone to jail for this. But if you’re a repeat offender who bought insurance to financially protect yourself from punishment, I can imagine some judge making a public example of you.

And the inevitable:

I don’t know if the new fare evasion rules will last long term. The changes reduce the expected yearly cost of fare evasion by nearly 90% compared to the old system. The MTA has a nine figure budget deficit, and fighting fare evasion is going to remain part of the plan to fix it.

I’m also expecting the MTA to spend a ridiculous amount of money to build bigger fare gates - New York is experimenting with them, although maybe they’ll try a new design before rolling it out widely.

Official idea rating:

1/5. Pay your subway fares! It’s an important source of funds for public transit, and it would be a huge bummer if the city has to bring the hammer down because we’ve successfully privatized monthly MTA passes with insurance. That said, looking at the underlying numbers... I wouldn’t be totally surprised if somebody eventually tries this. If not as a business, as an anarchist protest against paid public transit. (Please don’t try this.)

1. I’m assuming that a summons is a ticket and mutually exclusive from an arrest. This leaves out informal warnings, but it’s not clear to me that informal warnings will be replaced with official ones. If somebody who works with NYPD data reads this, let me know any nuance!

2. If you’re unfamiliar: Reinsurance is insurance for insurance companies. Essentially lots of insurance companies pool their money together so they don’t go bankrupt if they face a large number of claims at once.

3. If you’re unfamiliar: Adverse selection happens when the riskiest customers buy insurance because they know more about their risk than we do - like how someone who constantly gets caught evading fares knows they're a magnet for NYPD, but we have no way to tell them apart from any other customer.

4. If you’re unfamiliar: Moral hazard is when having insurance makes people take bigger risks - like how someone who knows their fare evasion ticket is covered might stop bothering to check for NYPD officers before hopping the turnstile

5. Technically some car owning New Yorkers take the subway, and some non-New Yorkers in Jersey regularly take it. I couldn’t find good data on this so I’m assuming these all roughly cancel out. I’m also assuming tourists don’t evade very much - which could be wrong!

6. Over 65 or have a disability

7. This is less clear, but the program today claims to enroll 355,303 New Yorkers. There’s some nuance with family size, but the percentage of New Yorkers under the poverty line is a proxy that gives us ~25% enrollment.