In order to bring about better protection against auto insurance fraud, lawmakers have called for an overhaul in the no-fault auto insurance in the state. There have been multiple bills that have been introduced by the Senate Republicans in order to protect the auto insurance sector from fraudulent claims, which are seriously impacting the auto insurance costs in the state and causing a steep rise in premiums.
The Senate Insurance Committee member, Martin Golden, R-Brooklyn stated that the system needed to be fixed and also emphasized that there were simple steps that could be taken to do the same. He also insisted that the state as a whole has to impose tougher penalties on the perpetrators of the crime and decertify medical practitioners who are found guilty of being involved in the insurance fraud.
James Seward, R-Milford, Senate Insurance Committee Chairman and other committee members Golden and Jack Martins, R-Mineola had conducted a hearing on the 26th of April and gave a hearing to the testimonies from consumer protection groups, industry representatives, as well as other stakeholders who had presented recommendations on how to curb fraud in the auto insurance system. There were comments on the three different bills that were introduced by the senators.
The representatives from the insurance companies argued that these reforms that were proposed were needed in the state in order to keep the no-fault insurance solvent.
Floyd Holloway, spokesman from State Farm Mutual Automobile Insurance Company stated in his testimony at Golden’s office that the sustained losses that arose from no-fault fraud had cost State Farm $1.30 on every $1 benefits provided. This had amounted to a total loss of $72.5 million for the year 2010 alone.
Most of the losses in no-fault insurance occurred when accidents were staged. These are dubbed runners and there are also people who claim injury as a result of an accident where they were not involved. The false medical or legal services that are provided by lawyers and clinics on these ‘falsified claims’ are then billed to the insurance companies. These are called runners.
There were many who stated in their testimonies that fraud was a problem in the present system but there were differences in opinion on how to curb fraud and the appropriate measures that needed to be taken.
In a combined testimony the Consumers Union and the New York Public Interest Research Group have emphasized the need for caution while going forward with the reforms.
