Last week the FBI and US Attorney for the Southern District of New York announced the arrests of 36 individuals who committed No Fault Insurance Fraud to the tune of $209 million dollars over the past several years. While I applaud the efforts of the NYPD, FBI and all the law enforcement agencies which were involved, these crimes will continue unless there is a change in the law and the perception of the law in New York and elsewhere.
Upon hearing of the arrests, I goggled “No Fault Insurance Fraud Arrests”. In addition to finding articles about the current arrests, I noticed that last year the authorities announced the largest arrest ever of such persons committing No Fault Insurance Fraud. The year before that was yet another “largest arrest ever”.
Having been in the car rental business inBrooklynfor the past 30 years, I have seen first hand the devasting effects of this fraud. While we all read that individuals pay more for their insurance that is only part of the problem.
Car Rental companies in other States and Cities often charge New Yorkers more to rent a car than non New Yorkers. Car rental rates inNew York Cityare more than double what they are in States likeFloridawhich have lower No Fault Insurance limits and far less fraudulent activity.
InNew York City, many car rental companies have closed their doors. Livery operators pay 2 to 3 times more for insurance inNew York Citythan elsewhere in the Country. That means the cost for a local car service cost more here than elsewhere.
Do you ever notice how many cars inBrooklynare registered out of State? not just private passenger vehicles. There are fleets of vehicles, among them car rental companies and delivery vehicles who choose to register cars inNew JerseyorPennsylvaniato avoid the highNew Yorkrates. The most expensive component of the insurance policy we all have on our vehicles is No Fault as there are few checks and balances on treatment. Health Insurance companies are permitted to review and authorize expensive procedures such as MRI’s. No Fault insurers are required to make payment and assume the procedure was medically necessary.
If someone sells drugs or carries an unlicensed fire arm, they are sentenced to jail for certain minimums of time. Committing Insurance Fraud often ends with a suspended sentence, restitution and probation. There are several bills pending inAlbanywritten to correct some of the glaring holes in the New York No Fault System. I hope that these arrests serve as a wake up to the dedicated legislatures we have inAlbanyto pass No Fault insurance reform.