NY Facing Fallout from Car Insurance Fraud
The state of New York is known for many things: The Statute of Liberty, being the “Big Apple” and having the Financial District. Now the state is known for its problems with auto insurance fraud. Many criminals are staging car accidents in order to collect money from auto insurers. This has become a huge problem because New York is a state that has no fault auto laws.
No fault auto insurance laws mean that no matter who is at fault for causing a car accident; the insurance claim filed by either party will still be paid. No fault auto law states have been targets of mass cases of auto insurance fraud for years. Many people now are asking that the auto laws in the state are changed so that the state moves away from being a no fault state. The economy has been hard on New York; many people are unemployed and they are seeing their auto insurance premiums increase. This is due to the excessive amounts of fraudulent claims that have been paid out to criminals by auto insurance companies.
Criminals have partnered with doctors and clinics in order to bill auto insurers for services that they never received in the first place. The New York Insurance Association, Inc. has stated that New York loses millions of dollars each year due to insurance fraud. There is a new bill called S2816A/A6286, that would help the state deal with the issue of auto fraud. This bill if passed would help auto insurers investigate possible cases of insurance fraud. Many criminals who commit fraud do not do it once; they find a system that works for them and then they exploit their talents in order to bilk these auto insurers out of thousands of dollars until they get caught.
There are a few different ways to immediately detect auto insurance fraud. The NYIA reported that most criminals quickly stage car accidents after they first sign up for their auto insurance policies. The fraud typically happens in the first sixty days because these individuals want to collect their money quickly so that they can turn around and do the same thing to a different insurer. They often only file a few claims with each insurer because they fear getting caught by authorities.
Auto insurers in the state would be able to terminate auto insurance policies of people who write bad checks or use stolen credit cards to sign up for auto insurance policies. The state also will consider giving people who commit auto fraud harsher penalties for their crimes. People who commit acts of fraud are often not very afraid of being prosecuted because many auto insurance companies are lax when it comes to investigating possible instances of fraud. There are a lot of politics where the system is concerned which leads to not having enough employees to thoroughly investigate insurance claims that may raise red flags with insurance agents.
The whole system needs serious reform. There should be an agency in New York that has the authority to oversee the insurance claims that are filed with auto insurers to ensure their validity. New Yorkers do not need to pay the price for people who choose to commit crimes. It is not fair and it allows criminals to choose New York as a target for their fraudulent operations due to its insurance laws. Hopefully the new bill will be passed so that car insurance fraud and auto insurance premiums can decrease in the future.
Source: Star Global Tribune
