OAI: NY Bills Aim to Help Eliminate Car Insurance Scams

New York, NY, March 26, 2012 --(PR.com)-- Three bills aimed at combating “no-fault” car insurance crimes were recently approved by New York state senators, underscoring the high costs of such scams that result in inflated premiums for all motorists in the Empire State, according to Online Auto Insurance.

Federal officials say the no-fault system—which requires New York-registered vehicles to carry coverage paying up to $50,000 to drivers and passengers for accident injuries, regardless of fault—has been the target of criminals conning the system and costing New Yorkers more than $1 billion in extra coverage costs every year. The bills, SB 4507B, SB 1685 and SB 2004, would allow insurers to retroactively cancel policies after discovery of fraud, making it more difficult for criminals to start scams with a false initial payment. They also reclassify crimes for staged accidents and “runner” recruitment and use under felony categories; “runners” are criminals paid to get clients or patients to take part in scams.

Lawmakers in the Sunshine State recently passed similar—but more sweeping—reforms to the Florida auto insurance system, which also requires drivers to purchase no-fault coverage. Part of the legislation passed in that state was to stop “jump-ins,” which is when a claimant falsely adds a passenger to a collision report to collect more benefits from an insurer.

The New York votes follow several major news items about such crimes, including charges brought against three dozen people accused of being part of what lawmakers called the “longest-running auto insurance rip-off scam in history.” The federal crackdown broke up a New York City crime ring that officials say rang up $279 million in phony accident benefits over five years. Officials also said another crime ring, based in Brooklyn, was recently shut down with 16 arrests of people believed to have intentionally caused a dozen accidents between 2009 and 2011 as part of a $400,000 scam.

Source: http://www.nysenate.gov/press-release/senate-passes-tough-auto-insurance-fraud-measures-1

OAI recommends that motorists be aware of their exposure to no-fault schemes. Criminals employing such scams can target specific drivers according to age and gender. According to lawmakers supporting the recent bills, cons zero in on female and elderly victims when staging accidents because they are less likely to be confrontational; Senate approval of the legislation occurred on the ninth anniversary of the death of Alice Ross, a 71-year-old Queens woman who was killed in what was found to be a staged vehicle accident. The trio of bills now head to the Assembly for further consideration.

For more on this and other car insurance issues, visit http://www.onlineautoinsurance.com/florida/ to get access to resources and an easy-to-use quote comparison generator.