New York Senate Passes Three Insurance Fraud Bills
In late March, the New York State Senate passed a trio of bills targeting stage-and-fraud automobile accidents that cost insurance companies hundreds of millions of dollars
What is a Stage-and-Fraud Auto Accident?
New York state law requires that automobile insurance companies offer personal injury protection, or PIP, insurance coverage. PIP coverage allows parties injured in a motor vehicle accident to claim up to $50,000 in insurance awards, regardless of who is at fault for the accident.
Unfortunately, unscrupulous individuals take advantage of this system, staging accidents to collect the PIP insurance. In one recent instance in New York, over 30 individuals were involved in a stage-and-fraud scheme, including doctors who examined the injured parties and lawyers who filed the claims. This scheme alone cost New York insurers over $275 million. Thirty-five of those involved were charged with racketeering, money laundering and healthcare fraud.
The high rate of fraud on the system raises rates for other policyholders. New York is one of the toughest states in which to make a profit in the insurance business. According to the Insurance Research Council, 20 percent of no-fault claims in 2010 were fraudulent and one-third were inflated.
What are the Provisions of the Proposed Legislation?
One of the new bills allows automobile insurers to retroactively cancel the policy of anyone who is later found to have submitted a false claim. It also gives victims of stage-and-fraud accidents the right to receive insurance benefits from their own company.
The other two bills make it a felony to plan or participate in a staged accident and to submit false claims. It is also now a felony to hire people to commit no-fault accident fraud and then submit and collect claim money.
Collectively, the laws also provide law enforcement with the tools necessar to swiftly and aggressively investigate and prosecute those suspected to be involved in stage-and-fraud accident schemes.
The bills must go to the Assembly for consideration before they can be signed into law.
If you believe you have been a victim of a stage-and-fraud accident, please consult an experienced personal injury attorney who can help you understand any compensation to which you may be entitled.