Joe Robach and the Senate recently urged the Assembly to pass three auto insurance fraud prevention bills before the end of this year’s legislative session. Auto insurance fraud costs New Yorkers more than $1 billion a year and has led to injuries – even death – for innocent victims.
The package of legislation passed by Joe Robach and the Senate in March would significantly cut down on auto insurance scams by increasing penalties for those who commit or assist in the fraud and gives more flexibility to insurance companies to prevent such criminals from getting policies and continuing to commit auto fraud.
Joe Robach and Senate action on the bills this year came on the ninth anniversary of the tragic death of Alice Ross, a 71-year-old wife and grandmother who was killed as the result of a fraud-related, staged auto accident in Queens. One of the criminals drove into her car, causing her to lose control of her vehicle, strike a tree and die.
In addition to risking the safety of innocent drivers, fraud is a key reason why New Yorkers pay over 50 percent more for auto insurance premiums than drivers in other states. Organized crime rings comprised of doctors, lawyers, patients and others, stage accidents, fake injuries, submit false insurance claims and rip off insurance companies and the state’s Medicaid system to the tune of billions of dollars.
In February, the longest-running auto insurance rip-off scam in history was busted by federal and New York City authorities. Three dozen people, including doctors, lawyers and patients coached to fake injuries, are accused of stealing more than $279 million in accident benefits over five years. The ring allegedly exploited the state’s “no-fault” auto insurance law as their own giant state-sponsored ATM machine. In New York, vehicles registered in the state are required to carry insurance that lets drivers and passengers obtain up to $50,000 for accident injuries, regardless of fault.
The state Department of Financial Services responded to red flags indicating the possibility of even more incidents of auto-fraud when it sent letters to 135 doctors in the metropolitan area after finding their billing practices “raised concerns regarding possible no-fault fraud.” The agency ordered them to provide documents supporting billed treatments or be banned from the no-fault system.
The legislative package includes:
Bill S.1685 makes it a crime to stage a motor vehicle accident with intent to commit insurance fraud. This felony crime would be punishable by up to seven years in prison.
Bill S.2004 makes it illegal to act as a “runner” who steers accident victims towards crooked doctors who bill Medicaid for unnecessary medical treatments. Runners are key members of auto fraud rings. Under this bill, they could get four years in prison.
Bill S.4507 allows insurance companies to retroactively cancel policies taken out by people who commit auto fraud. These criminals often take out policies and pay for them with bad checks or stolen credit cards just before they stage accidents. Under current law, insurance companies cannot cancel the policy and policyholders wind up paying for it through higher premiums. This bill would take that burden off honest consumers. All three bills are pending in the Assembly. Should you have questions about this legislation or any other bill in the Senate, contact the Joe Robach office.