Due to the rising costs of auto insurance, Allstate Insurance has urged New York lawmakers to find ways and means to curb the increasing number of no-fault insurance fraud which according to trade groups, cost drivers over $200 million in 2010.
Krista Conte, Spokeswoman from New York’s Allstate made an appeal at the hearing this week at the New York State Senate Insurance Committee, where law enforcement officers, doctors, insurers, industry experts, and the rest presented a whole lot of startling data, facts, as well as expert opinions with regard to the insurance fraud crisis in the state of New York, which is something that cannot be ignored anymore.
In all, the fraud has cost the motorists as well as insurers over $200 million last year and this has been testified by the Insurance Information Institute.
The total loss to motorists has been estimated to over a million last year, by the Property Casualty Insurers Association of America (PCI).
New York City has now become the hub of no-fault fraud activity and this is driving the motorists’ premiums up North.
The number of PIP claims that have been filed in the state has risen to 50% between 2004 and 2010. The average has risen from $5,873 to $8,664 in that period alone while the medical care costs had risen only 25% during that period, as per the reports from the institute.
Conte has stated that the present levels of no-fault frauds in the state have reached grave proportions.
Conte also added that the no-fault fraud was not only costing the insurers and the New York motorists hundreds of millions of dollars each year, but it was also putting the motorists at risk. She also went on to state that the perpetrators of the crime were taking undue advantage of this no-fault system and that they were part of a bigger, organized crime ring. So, in essence, the fraudsters who were part of this crime ring were imposing their ‘fraud tax’ on gullible, hard-working New Yorkers by fooling with the auto insurance industry.
Hence, lawmakers in New York have come under immense pressure for a while now, as insurers are up in arms over the losses they have to face every year due to the rising costs in auto insurance claims and motorists on the other hand have to deal with the losses and the risk of driving around in New York City.
