This is forcing residents to have to pay more for their coverage as it is causing insurer costs to soar.
A startup company that has placed its focus in auto insurance, has released an article that has detailed its data that suggests that cases of fraud are considerably on the rise in New York.
The article provided an explanation of the upward trend of fraudulent claims within the state.
It also went on to show that the auto insurance fraud is not a victimless crime, because it is causing residents of the state of New York to have to pay higher premiums than they would otherwise be required to pay. The research that was provided within the New York Motor Insurance article showed that over one third of all claims in the state are fraudulent.
It stated that 36 percent of all auto insurance claims in New York state are fraudulent.
This makes the instance of auto insurance fraud epidemic. The estimated cost of this issue to taxpayers is more than $1 billion per year. According to Brooklyn based assistant district attorney, Jeff Ferguson, if nothing is done about this serious problem, there may soon be a time that coverage is too expensive for the majority of the state’s drivers to be able to afford.
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The reason that this is becoming as expensive as it is for taxpayers and drivers who are law abiding, is that auto insurance companies are being forced to make up for the losses that they experience as a result of fraudulent claims payouts. To cover those expenses, they typically need to increase their rates. Moreover, as the location of a driver’s residence is a factor in the calculation of his or her premiums, it can mean that in areas where fraud is most common, law abiding customers must still pay more.
The point to the auto insurance news article was that innocent customers are paying for the crimes of others. Fraud is allowing criminals to be paid and law abiding citizens to foot the bill. The article stated that in 2009, Brooklyn drivers were paying $2,143 per year, on average, in premiums. “This is nearly three times higher than the national average of $785 as reported by the National Association of Insurance Commissions (NAIC) for 2009,” it said.