New York Group Says No-Fault Fraud Problem Growing

A coalition of New York insurers says blaming medical mills are driving up the cost of auto insurance, a trend that amounts to a “no-fault automobile insurance fraud crisis” in the state.

The New York Alliance Against Insurance Fraud (NYAAIF) said the costs are being driven by excessive billing from “fraudulent companies that provide few if any real health care service to the public.”

According to NYAAIF, the first half of 2010 saw questionable liability insurance claims involving excessive medical treatment in New York climb 42 percent to 431, up from 304 in the first six months of 2009.

The Insurance Information Institute has said that fraud in the New York no-fault system accounts for roughly 20 percent of every no-fault claim paid — or about $1,561 per claim. Insurers claim that amount represents $230 million.

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Source: New York Alliance Against Insurance Fraud

Topics Fraud New York