Auto insurance fraud spiking rates in New York

Auto insurance fraud New YorkInsurance fraud continues to complicate New York auto insurance

Insurance fraud is a serious problem throughout the U.S., and one that continues to defy any measures that have been taken to mitigate it. In New York, the issue is beginning to cause significant financial strain for consumers, especially in regards to auto insurance. According to Brooklyn Executive Assistant District Attorney Jeff Ferguson, auto insurance fraud is causing the cost of this coverage to grow at an alarming rate. If measure are not taken quickly, auto insurance may soon become too expensive for the common consumer to manage.

36% of claims filed are fraudulent

Staged accidents and fraudulent claims are causing auto insurance companies to hemorrhage money. In an effort to recoup the losses they are seeing at the hands of insurance fraud, these companies tend to raise rates for coverage across the board, making coverage more expensive for every policyholder. According to Ferguson, approximately 36% of all the auto insurance claims being filed in the state are either fraudulent or inaccurate in some fashion.

Fraud continues to drive up cost of auto insurance

Drivers in Brooklyn alone paid an average of $2,143 each year for their auto insurance in 2009. This is 79% higher than the average of the rest of the state, and higher than the national average. New York is one of the most expensive states to live in terms of auto insurance, largely due to the high frequency of insurance fraud occurring in many parts of the state. Officials note that laws are needed in order to cut down and deter fraud, but such laws have proven to be somewhat elusive.

Officials push for new legislation concerning “runners”

Some state officials are pushing for legislations that would make the use of “runners” and illegal practice. Runners are third party individuals that traffic those injured in car accidents to medical clinics. These people are commonly used in insurance fraud schemes, as they successfully remove a degree of accountability from the insurance equation and give medical clinics an opportunity to conduct expensive and often unnecessary treatments, which insurance companies are then forced to cover.

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