Fraud, rings, staged accidents, and organized exploitation of the No-Fault system raises insurance premiums, rider costs, and ultimately hurt the bottom line for all New Yorkers. This growing abuse threatens the fairness and affordability of the entire system.
Fake accidents cost the auto insurance industry up to $20 billion per year, which is raising the costs of individuals’ and drivers’ premiums by up to $300 or more per year.
No-Fault fraud reports accounted for 93% of all healthcare insurance fraud reports received by the Department of Financial Services in 2024.
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New York saw a whopping 1,729 documented intentional accidents in 2023.
When bad actors commit insurance fraud, everyone pays.
New York’s No-Fault law makes for-hire transportation insurers responsible for damages of up to $50,000 per claimant regardless of who caused an accident. Fraud can include intentionally staged accidents and opportunistic fraud; both can result in excessive and unnecessary medical billing. No-Fault insurers often pay for health services that were never rendered or are unrelated to the accident.
New York City mandates for-hire transportation drivers carry No-Fault insurance coverage of $200,000 per person – four times higher than the minimum required in other parts of the state – making for-hire vehicles, drivers, and riders a target for fraudsters seeking potentially higher payouts.
Fraudulent claims drive up the costs of insurance premiums and state taxes. The high volume of fraudulent cases places an unnecessary strain on the court system as the state requires more resources to handle the influx of thousands of fraudulent cases each year.
Insurance cases account for about 70% of all state court cases in New York. This high volume, and the resources required to handle these cases, imposes a huge financial burden on taxpayers and policyholders alike, while congesting the legal system.
Fraudulent claims create an enormous backlog of cases that delay the resolution of legitimate claims, inflate premiums for drivers who are already struggling with high operating costs, and strain providers’ resources.
This cycle ultimately discourages competition in the for-hire transportation insurance market, leaving drivers with increasingly fewer options and even higher rates.
Fake accidents and opportunistic fraud can result in serious traffic disruptions, causing road delays and closures that affect everyone and often create hazardous conditions. Most importantly, these bogus accidents can result in serious injuries and fatalities, not only for those involved, but also for innocent bystanders.
American Transit Insurance Company (ATIC) and Uber have taken legal action against coordinated insurance fraud schemes. Many of the defendants are medical providers who claim to have provided care to accident victims. In reality, this care was never rendered, excessive, unnecessary, and/or unrelated to the accident.
ATIC encourages for-hire transportation professionals to install dashcams to help document accidents. These cameras can deter fraudsters and provide evidence to help identify and address insurance fraud.
Anyone suspecting insurance fraud can and should report it confidentially to the DFS online at: dfs.ny.gov/form/report-suspected-insurance-fraud, or by calling the Insurance Fraud Hotline at: 888-FRAUDNY (888-372-8369).
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