No-Fault Auto Insurance in NY May See Crucial Revisions Before 2010


To make New York State more efficient in combating against fraud and abuse in the auto insurance industry, State Insurance Superintendent James Wrynn submitted a draft of amended provisions covering no-fault auto insurance earlier this month.

No-Fault Auto Insurance in NY May See Crucial Revisions Before 2010The changes in auto insurance, in which Wrynn espouses for the “betterment of all,” may be in place before the close of 2009 with much anticipation coming from motorists and auto insurance providers.

Wrynn, in the draft, said that this draft had provisions which aim to spare New York car owners and drivers from being caught in the middle of payment abuse and tax fraud, especially when they have to pay their auto insurance premiums considering the dire economic times today.

This said draft is designed to mitigate the frequency of insurance fraud in the state.

The Insurance Department Bureau, according to its 2009 records, had entertained some 11,000 complaints dealing with fraud and felony in the no-fault scheme. This figure is significantly higher than the number in 2008 which has increased by 7% since then, and 52% since 2007.

Moreover, Wrynn’s proposal also provides an improvement in current insurance forms used to eliminate the need, or lessen the need for verification of claims to expedite processing and releasing of payments.

Furthermore, the Superintendent also highlighted that lessening of costs per no-fault claim is something consumers will be looking forward to. With more revisions in place, the corresponding medical exams for state car owners and drivers will be fixed on locations which are “geographically convenient.”

In effect since 1974, the active, current no-fault auto insurance provides a collision victim a state-protected right to be reimbursed and also the right to collect reimbursement directly from an insurance provider. Regardless of who caused the accident, an insurer also provides for medicines and hospitalization costs. Sadly, insurance companies report that this system provides an open door for fraudulent claims to be made easily, which places insurance companies in a vulnerable state.

The Superintendent’s intent in the draft is two-pronged: reduction of insurance costs from customers, and mitigation of the incidences of abuse and fraud of no-fault claims.

Wrynn explained that such a reform in the current state’s system is essential and timely, particularly the necessity for regulatory reform. One imperative factor to be taken into consideration – found to be a major cause of delays in expedient release of claim payments – is the alarming increase of insurance claim disputes of no-fault claims filed by medical practitioners and health service companies. If the need is urgent, multiple examinations may be scheduled in one day.