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

NYAAIF noted that this costly form of insurance fraud rose ninepercent between 2008 and 2009 and accounted for 54 percent of allfraud reports received by the Bureau. In its annual report, whichwas released this month, the Bureau estimated that suspectedno-fault claims totaled 13,433 last year, a noticeable uptick from12,339 in 2008.

"No-fault fraud is often committed by organized criminalenterprises operating corrupt medical clinics that submitfraudulent claims for treatment that was either not performed ornot necessary," explained Ellen Melchionni, president of NYAAIF, ina press release.

The Bureau agreed, adding that this type of fraud can ofteninclude corrupt medical clinics and corrupt attorneys, acting withstate accident/solicitation rings to submit fraudulent no-fault andbodily injury claims. It cited statistics from the InsuranceInformation Institute (I.I.I.) that indicated the average no-faultclaim 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 thehighest in the country -- 64 percent higher than the U.S. averageof $5,289. Overall, the Bureau investigated 1,707 new cases in2009, which represented a 25-percent leap from the previous year.In addition, 24,920 reports of suspected fraud were submitted in2009, up more than 8 percent from 2008.

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

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