Rise in auto insurance rates inevitable due to auto insurance fraud!

The next time you open your mailbox and see a hike in your auto insurance bill, you must ensure that you don’t get upset with the insurance agent or your insurer. You must instead target all your anger on those who are responsible for this state of affairs – the auto insurance fraudsters.

These are the people who have ruined the entire system and created this mess state the local officials. In the State of New York, the average auto insurance rates are the fourth highest and this is due to auto insurance fraud. This bit of information has come from the elected
representatives as well as law enforcement agencies.

Auto accidents are staged by con artists and there is an entire network that operates in this scam. This includes unscrupulous doctors who file false claims for medical treatments and they make it look like the persons have suffered serious injuries. They collect the insurance claims by doing all of this, state officials. There are a number of auto insurance fraud cases in the State of New York every year and this costs insurers millions of dollars each year. Hence, the insurance companies have no choice but to pass on these costs to the customers. During 2010, insurance fraud had cost the residents over $204 million, as per reports from Fraud Costs NY, which is a collation of business and civic groups from the state.

"The situation is even worse for motorists in Brooklyn," stated Sen. Marty Golden.

He claimed that the motorists in his district paid over 185% over the state average for auto insurance cover.
Insurance companies are shelling out millions of dollars each year to settle these fraudulent claims as they don’t have sufficient time on hand to investigate each case and bring the fraudsters to book, stated Golden.
He went on to add that there is one company that has already left New Jersey and is now threatening to get out of New York as well. If that happens, New Yorkers will be short of one company, which means that consumers will have lesser choices and this will in turn drive up the auto insurance rates.

The no-fault auto insurance cover is being blamed for this fiasco. This is a faulty system and criminals have been using the loopholes in this system to get past the no-fault laws at the expense of the motorists in New York, stated Golden. Now Golden has introduced the legislation and hopes that it will help in addressing the problem.
By Richard Burton
Published: Wednesday, June 29th, 2011

Now insurance fraud would become more difficult – thanks to the bill

                                                                                    Insurance fraud is costing the policyholders as well as the state millions of dollars each year and business leaders in New York are hence urging policymakers to pass the legislation to help enable them to fight the insurance fraud.

Fraud Costs New York is a coalition of consumers, business leaders, and lawmakers. It has called upon the state legislature to bring about reforms in the no-fault auto insurance policy in order to curb auto insurance fraud and insurance scams that they claim has totaled to over $200 million in the last year alone.

The New York State Business Council’s acting President Heather Briccetti has stated that the State Legislature must stop funding criminals by bringing about reforms to the no-fault insurance laws. By bringing about this reform Albany could easily do away with the ‘fraud tax’ and also reduce the premium costs for small businesses all over New York, stated Briccetti.

The coalition has demanded that the Legislature must act on the bill S.2816/A.6286 which was sponsored by Senate Insurance Committee Chair James Seward, R-Milford, as well as Assembly Insurance Committee Chair Joseph Morelle, D-Irondequoit. This would give insurers the teeth to fight insurance fraud & abuse and that will help in reducing the no-fault costs.

Kristina Baldwin, assistant VP of Property Casualty Insurers Association of America stated that there are certain loopholes in the existing laws and these highly innovative criminal gangs seem to have figured out a way to exploit the same. Hence she feels that there needs to be a stricter law in order to address these issues and plug the loopholes.

The no-fault insurance system works this way – the insurer will cover all the damages up to the value of the policy, irrespective of who was at fault during the accident. Hence, the no-fault fraud generally occurs when fraudsters orchestrate staged accidents or sometimes individuals may claim for injury even when they were not involved in the accident.

Allstate Insurance Company announced last Thursday that it was planning to file a fraud lawsuit against around 37 residents of New York and was seeking to recoup $2.1 million. This comes close to the heels of yet another auto insurance fraud lawsuit filed by the insurer this year for around $4.7 million. In all, Allstate has filed about 29 lawsuits since 2003 and has claimed over $167 million in damages.

Allstate spokeswoman Krista Conte has stated that the no-fault system is currently being exploited and innocent citizens have become the victims due to this.
By Richard Burton
Published: Wednesday, June 8th, 2011