Everyday honest people are paying more than they should for New York auto insurance due to fraudulent claims made under the no-fault state insurance plan. These claims have raised policy costs hundreds of dollars by car insurance companies trying to recoup their losses. Honest consumers are left footing the bill for criminal behavior.
Some of the criminals cause accidents on purpose, file false accident claims or exaggerate injury reports. Many times crooked doctors or lawyers are also involved. The insurance companies, in a rush to meet state required deadlines for denying or paying claims, often don’t have time for a proper investigation. They have no choice but to pay the claim. This costs millions each month. If the insurance companies didn’t pass the losses onto us, they would go out of business. We need insurance companies so we pay the higher rates.
Another less known type of fraud, but just as lucrative is the insurance broker fraud. Some brokers will set you up with a policy and take your money. Then one day you make a claim and find out that the policy you paid for doesn’t cover what the broker promised. Always get a copy of your policy and check it to make sure all the coverages you pay for are listed and never pay in cash or to the individual broker. Always make out a check the insurance agency or company.
In order to try and crack down on fraud, the New York State Fraud Claims Act allows any member of the general public with knowledge and evidence of fraudulent behavior against a government entity to report the activity, sue on behalf of the government (qui tam), and collect up to triple the defrauded amount. A person can earn a reward of up to 30% of the recovered amount. Qui tam claims resulted in over $177 million dollars in rewards in 2007. Since New York auto insurance companies need to be state licensed they may fall into this category. People are also encouraged to report fraud against New York auto insurance companies by calling 1 (800) 835 – 6422 or writing to:
Insurance Fraud Bureau
New York State Insurance Department
25 Beaver Street
New York, New York 10004
New York auto insurance fraud civil penalties include $1,000 for falsifying auto insurance cards, $5,000 for filing a false claim plus the amount of the claim, and penalties, fines and jail time for causing an accident on purpose. Fraud affects us all therefore we all need to work together to stop false claims or other criminal behavior.
Separate summary: New York auto insurance companies have taken a big hit by criminals filing fraudulent claims. It gets harder and harder to obtain cheap car insurance because of these unscrupulous individuals. Be extra cautious to try and avoid staged accidents and if you believe you have been a victim of fraud, report it immediately to the Insurance Fraud Bureau.