Car Crash Fraud Costing New Yorkers Millions

by emallernee | June 2nd, 2011

June 2, 2011

In New York, staged car crashes cost a reported $200 million in fraud and insurance abuse annually. A new CBS New York story says that thousands of no-fault car crashes are faked each year to scam insurance companies for money, noting that the trend has become costly not only to insurance companies but to all New Yorkers.

“Those who engage in insurance fraud are actually hitting all of us in our pocketbook,” Queens District Attorney Richard Brown told CBS New York. “I would characterize it as a fraud tax that is being imposed.”

The problem has grown large enough that it’s now being attacked by all sides–insurance companies, yes, but also politicians, business owners, and consumers.

Proposed legislation in Albany, New York, would combat the problem by making staging a car accident a class C felony, which carries with it a maximum 15-year prison sentence.

Also working to reform insurance fraud legislation is a coalition of business leaders, consumers, and lawmakers called Fraud Costs New York that’s pushing hard for legislation that would fix the state’s no-fault insurance system.

For insurance companies, the new laws can’t come soon enough.

The Legislative Gazette reports that late last month Allstate Insurance Company announced that it was filing a lawsuit against 37 New Yorkers seeking to recoup $2.1 million in damages. Already this year Allstate filed a similar lawsuit for $4.7 million. These are but two of 29 total fraud lawsuits filed by the insurance company, which seeks more than $167 million in damages.

Read more.

If you or someone you know were the victim of a New York auto accident, the New York accident lawyers at the Law Offices of William Mattar may be able to help you.