Two million dollars a day is stolen from honest New York drivers, according to the Insurance Information Institute (I.I.I.)., which results in adding $124 to the cost of a typical auto insurance policy, and increases the likelihood that drivers will be the target of a staged “accident.”
Jeanne M. Salvatore, I.I.I.’s Vice President for Consumer Affairs stated that “Driving safely is tough enough without criminals creating additional crashes on our streets. Staged accidents are not simply an economic crime, they result in painful injuries, unnecessary property damage and even the identity theft of unsuspecting motorists.”
The I.I.I.’s report strongly backs repeated calls for reform of NY’s no-fault auto insurance system. The system was designed to eliminate proof of fault, and the necessity of filing a lawsuit before compensating injured victims. But the I.I.I. attacks its misuse by “fraud rings, employing dishonest attorneys, doctors and alternative medical professionals,” who “continue to use the state’s auto insurance system as a way to make money.”
The Report listed the following “loopholes” that need to be closed by reform legislation, if fraud abuses are to be contained:
–Requiring medical providers to submit no-fault bills to insurance companies within 45 days — down from 180 days. Claims should also be reported to insurers within 30 days — down from 90 days.
— Establishing flexible medical treatment guidelines to reduce inflated billing of injuries and eliminating phony or dubious medical treatments.
— Injured claimants would retain the right to be treated by any medical provider who handles no-fault auto accidents.
— Giving insurers more time to investigative claims where there is a strong suspicion of fraud. Currently, they have only 30 days to determine if an auto claim is fraudulent.
— Increasing penalties for those convicted of no-fault fraud. This would include making it a felony to be found guilty of being a “runner” or the facilitator in a no-fault scheme. In addition, medical professionals found guilty of claim fraud would be “decertified” and no longer able to bill no-fault when treating patients injured in auto accidents.
–Making arbitration mandatory in disputed no-fault claims.
It added that “While New York City has the lion’s share of the fraud mills, this crime affects drivers throughout the state.”
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