Auto Insurance Fraud in New York City
Posted on January 18th, 2011
According to the article “Insurance Study Sees Widespread Fraud in NYC” by Erik Holm, New York City residents are much more likely to file false claims driving up the cost of auto insurance quotes in NYC. This is based on some research conducted by the Insurance Research Council, a nonprofit group funded by insurance companies.
New York state’s “no fault” system was implemented in 1974 and it allows someone injured in a crash to file up to $50,000 worth of claims for medical expenses or even lost wages with their own insurance company regardless of who is at fault. The purpose of this was to speed up processes by eliminated the argument over who whose fault the accident was. Through this system, perpetrators have figured out how to bank on false claims and take home cash.
The state insurance department has been working for over a year to revise the no-fault insurance regulation. The Insurance Fraud Bureau estimates no-fault fraud has increased dramatically from 2006 at 10,117 instances to 13,433 instances in 2009. Auto insurance companies are hoping that the insurance department’s changes will make it easier to deny fraud claims, but it’s going to be a process that may take years to make a difference.
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Tags: City, New York, New York City, York City
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