Auto insurance fraud legislative package gets New York Senate approval

Auto Insurance Fraud

Three bills that are geared toward reducing the rate of scams on the system are now moving forward.

The New York State Senate has just given its approval to three bills that have been designed to help to tackle the problem of auto insurance fraud by raising the penalties against those who take part in these behaviors, and by providing insurers with greater flexibility for preventing criminals from being able to obtain policies so that they can continue to run their scams.

The package for three bills has now been approved by the Senate and is on its way to the Assembly.

The first measure in the package is SB 3547. This was sponsored by Senator James Seward (R – C, I-Oneonta). This would make auto insurance fraud a class D felony crime when it involves staging an accident in order to obtain a payment on a policy. If the staged accident results in serious injury or death, the person responsibleAuto Insurance Fraud could face up to 25 years in prison.

The Senator pointed out that auto insurance fraud causes rates to rise and “poses a serious public safety risk”.

Senator Seward stated that the elderly and women drivers are especially at risk of staged auto insurance fraud accidents. He explained that “They are often targeted because they are less likely to be confrontational after an accident, making it easier for criminals to take advantage of them. The Senate has recognized the need for change for some time and the Assembly needs to join the effort so we can put these criminal enterprises out of business for good.”

Senate bill 3033 was sponsored by Senator Dean Skelos (R – Rockville Centre). This made it illegal (either as a class D felony, a class E felony, or a misdemeanor) to act as a fraudulent auto insurance provider “runner”. Should this bill pass, the runners and those associated with them could face up to seven years in jail for the role that they play in the scams.

Bill S1959A was sponsored by Senator Martin Golden (R – C, Brooklyn). This provides auto insurance companies with the ability to retroactively cancel policies that have been purchased by individuals who have committed fraud against insurers.