Allstate files $5 million lawsuit in New York as a result of fraud

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Allstate Insurance NewsAllstate Insurance is looking to recover some $5 million in New York that has been lost due to fraud. The company has filed a lawsuit targeting 21 individuals, 17 of which are being accused of misrepresenting public entities. The insurer claims that these people have continuously submitted fraudulent claims on behalf of corporation that were owned and operated by laypersons, as opposed to licensed professionals. The insurer notes that fraud is one of the primary reasons rates have been rising in the state in recent years.

Allstate has filed some 33 lawsuits in the state since 2003, totaling more than $180 million in losses. The insurer has been pressuring state lawmakers to take a more aggressive stance on insurance fraud in New York, but has been unable to influence them toward any action. Until lawmakers make a real attempt to stop fraud, Allstate says that innocent policyholders will continue to pay a “fraud tax” – higher premiums to offset the losses associated with insurance fraud.


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Fraud is often the result of the state’s no-fault insurance system, which has insurers paying money on claims regardless of whether they are fraudulent or not. Insurers are free to investigate the authenticity of claims, but only after they make payments. Allstate is not alone in its efforts to change the system and is supported by a number of other insurance companies that have also lost money due to fraud.

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