Suspicious claims and insurance fraud continue to plague New York's no-fault auto system. In fact, many contend that the problem is only worsening. In a recent press release, the New York Alliance Against Insurance Fraud (NYAAIF) pointed to a 30-percent increase in the number of no-fault fraud reports received by the New York State Insurance Fraud Bureau since 2005.

NYAAIF noted that this costly form of insurance fraud rose nine percent between 2008 and 2009 and accounted for 54 percent of all fraud reports received by the Bureau. In its annual report, which was released this month, the Bureau estimated that suspected no-fault claims totaled 13,433 last year, a noticeable uptick from 12,339 in 2008.

"No-fault fraud is often committed by organized criminal enterprises operating corrupt medical clinics that submit fraudulent claims for treatment that was either not performed or not necessary," explained Ellen Melchionni, president of NYAAIF, in a press release.

The Bureau agreed, adding that this type of fraud can often include corrupt medical clinics and corrupt attorneys, acting with state accident/solicitation rings to submit fraudulent no-fault and bodily injury claims. It cited statistics from the Insurance Information Institute (I.I.I.) that indicated the average no-fault claim in New York was $8,690 in 2009, exceeding the average of $5,615 in late 2004 by 55 percent.

I.I.I. said that New York's no-fault claims costs are among the highest in the country -- 64 percent higher than the U.S. average of $5,289. Overall, the Bureau investigated 1,707 new cases in 2009, which represented a 25-percent leap from the previous year. In addition, 24,920 reports of suspected fraud were submitted in 2009, up more than 8 percent from 2008.

NYAAIF is a cooperative effort by insurance companies in New York to educate the public.

Special Reports /

No-Fault Auto Insurance Fraud: Still An Epidemic in N.Y.

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