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NY Car Insurance Fraud Keeps Rising

In the state of New York, cases involving suspected no fault insurance fraud continue to rise dramatically. According to a report released by the New York Insurance Fraud Bureau, suspected fraud cases have risen about 30 percent in recent years. No fault insurance fraud increased nine percent just between 2008 and 2009, and in that time period accounted for over half of the Bureau's total fraud complaints [1]. The problem has been longstanding, but is one that certainly gained infamy recently is high profile fraud rings have been uncovered with connections to doctors' offices, collision shops and many other industries.

Details of Annual Report

The New York Insurance Fraud Bureau releases an annual report detailing fraud claims across the state. This year's report stated that the number of suspicious no fault claims rose to 13,433 for 2009, up by over a thousand from the previous year and over 30 percent higher than 2005 figures [1]. The numbers have been steadily rising and officials in different departments in the New York state government have been trying to come up with ways to counteract the problem.

The Bureau's report included statistics from the Insurance Information Institute (III), which compare the average cost of a no fault claim in New York to the national average. Nationwide claims average $5,289, while New Yorkers file no fault claims averaging $8,690, an astonishingly high rate and one of the highest in the country. Interestingly, this average has risen by well over $3,000 in just a four year time span [1].

NYAAIF Weighs In on Report

The New York Alliance Against Insurance Fraud is a cooperative effort by insurance companies in the state of New York to educate the public about insurance fraud and its financial costs, the many different forms it can take and what consumers can do to help cut down on its frequency. Many people feel helpless whenever they do run into a suspected no fault fraud situation, but there are things they can do. Whether you have witnessed a staged swoop and squat car accident or have information about a more complex insurance fraud operation going on, you can report anonymously to the authorities and do your part to keep auto insurance prices low.

According to the NYAAIF, no fault car insurance fraud in New York is often a highly organized activity that can extend far past street level criminals and reach into lawyers' offices, medical clinics and other organized entities in the state. Clinics charge for treatments that are either not performed or were not necessary, lawyers file fraudulent claims on behalf of perpetrators, and on and on. According to NYAAIF president Ellen Melchionni, the worst part of all of this is that it is the innocent, law abiding motorists in the state who end up paying the price [1]. The exorbitant expenses incurred by fraudulent no fault claims has led to sharp increases in no fault insurance rates in the state.

New York is consistently among the most expensive states for auto insurance, and that position has only been solidified by these recent fraud woes. With rising average costs, the rolls of uninsured motorists have risen as well. So those who remain legally insured end up paying more for both their PIP coverage and their uninsured motorist protection. The drivers who are compliant pay for the deeds of those who are not.

No Fault Struggling in NY

The recent significant uptick in no fault auto insurance fraud across the state of New York and especially in New York City has led many in the general public as well as certain legislators to take up the call for auto insurance reform in the state. The high prices customers have to pay appear to tie directly in to increased fraud rates. Seemingly honest New Yorkers are being sucked in with so called criminal types in these elaborately designed fraud rings. From drivers on the street staging accidents to doctors coming up with fraudulent diagnoses or performing unneeded treatments to increase the bill for the insurance company, many different groups are in on these abuses and it is hard to pinpoint just one demographic as the guilty one.

The no fault auto insurance system is definitely struggling in the state of New York. High costs have made it hard to afford for many of the state's drivers. Rampant and ever increasing fraud have not only driven those costs higher, but also potentially made it harder for honest claimants to get the care they need due to increased scrutiny and skepticism over their legitimate claims. The high level of fraud also affects medical costs as well. All across the board, no fault fraud is threatening the New York auto insurance system, attacking it from every possible angle.



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