Cheaper Car Insurance Act’ in New York Aims to Curb Auto Insurance Fraud


A New York senator is ushering in a proposal for federal law which he hopes will cause much needed rectification with regards to automobile insurance fraud crimes and criminals involved.

Cheaper Car Insurance Act’ in New York Aims to Curb Auto Insurance FraudNew York Senator Chuck Schumer’s legislation, called the Cheaper Car Insurance Act of 2010, aims to bring in new federal penalties for automobile insurance fraud.

Sen. Schumer said that the Cheaper Car Insurance Act would be able to prosecute fraudulent criminals with specific penalties. The Act was triggered by a recent report which shows that automobile insurance fraud incidents have been rising in New York which consequently increased insurance rates for New York drivers.

The increase in suspected fraud cases in the city has spiked by 33% since 4 years ago. The spike has forced auto insurance companies to increase their rates by an average of 6.35% in 2009.

The Senator said that the problem has “exploded” in the city, while several experts speculate that cases are anticipated to rise in upstate New York.

Sen. Schumer likened his initiative to the response to the drug trafficking trade problem which has also plagued the city.

He added that he hopes more insurance fraud criminals would be brought to court and more cases would be deterred from entering the upstate.

The Senator expressed concern that there are several criminals who operate in the local area who are emulating the modes of operation by the ‘big city operators.’

The Cheaper Car Insurance Act of 2010 will also include fraud cases across the state with corresponding fine penalties and jail time. This will hopefully mitigate the cases of auto insurance fraud. Criminals will be arrested, tried in the federal court and, if found guilty, will be incarcerated for 5 to 15 years. Fines will also be levied amounting to as much as $100,000, depending on the judge’s decision.

Low level participants, organizers, and insurance fraud masterminds are the primary targets of the legislation. Furthermore, anyone who accepts money through fraud or who stages auto accidents will be charged with a felony.

The Senator explained that the problem should be tackled “head on” otherwise car insurance rates will continue to increase. He also asserts that the Act would stop the rising rates once it is passed into a law.

Sen. Schumer said that everyone gets ‘hurt’ because of auto fraud since car insurance bills go up even though the car goes down in terms of its value. Small business are also affected since there will be difficultly in providing insurance for all of their delivery vans.

Meanwhile, the recent irregular flurry of snow fall in upstate New York has reached levels with as much as 40 inches of snow in some areas.