New York may be facing some changes in auto insurance as 2009 closes. During the first two weeks of December, State Insurance Superintendent, James J. Wrynn, has released a draft of amended regulations governing no-fault automobile insurance. According to Wrynn, this draft will make the state more effective in fighting abuse and fraud in the insurance industry.
Superintendent Wrynn also said that New York drivers should be spared of the burden of paying abuse and fraud taxes when they pay for their auto policy premiums. He stressed that particularly in today’s tough economic times; they need to be very vigilant when it comes to safeguarding pocketbooks of consumers.
Reports say that New York has long been ready for a change in its auto insurance system. The existing no-fault automobile insurance which has been in effect in New York since 1974, gives a collision victim a right to be reimbursed and collect directly from their insurance provider. The no-fault automobile insurance pays the accident victim for hospital and medial expenses including lost salaries regardless of who caused the accident. Insurance insiders said that the old system allows fraudsters to collect claims easily and makes insurance company vulnerable to fraudulent claims. According to sources, many attempts have been made to set forth a legislative action that will amend this 1974 policy. One has been attempted back in 2002, but it barely made a dent in the system. This year, experts speculate that Wrynn’s plans of making the no-fault automobile insurance more user-friendly will be the first noteworthy revision since 2002. Insurance insiders said that not only will Wrynn’s draft reduce insurance costs from consumers; it will also lessen the number of fraud and abuse cases of no-fault claims.
In a recent interview, Wrynn said that a reform in the No-Fault system is desperately needed and his proposal, including a regulatory reform is a big and important step, making them closer to the goal. Wrynn explained that one important factor to consider in increasing auto claims costs is the booming of disputes of no-fault claims filed by health service providers and medical practitioners. These disputes, according to Wrynn, are ones that have been causing delays in the payment of insurance providers to policyholders. There are times that health service providers question the amount of medical expenses resulting to a back-and-forth process of sending and receiving documentations to insurance providers, which normally lasts for weeks. When this happens, claims payments to car drivers and vehicle owners take a much longer time to be released.