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Fraud Drives Meteoric Rise in New York Auto Insurance Premiums

Over the past decade, New York City has seen a 70 percent increase in personal injury protection claims including lost wages, medical bills, and other auto insurance-related claims.

This upsurge exists concurrently with a 49 percent jump in the cost of medical care in the city.

The Insurance Research Council (IRC), which conducted the study, says the average PIP claim in the city exceeds $15,000 while the amount for the rest of the state is just $7,000

The senior vice president for the IRC, Elizabeth Sprinkel said the statistics validate the issue of claims abuse in New York, which is made worse by medical providers who are over charging insurers and over treating their patients to get that claim money. These so called “medical mills,” as well as organized crime rings that turn auto fraud into what amounts to an industry are at the heart of the escalating problem.

Together, these fraudulent practices are elevating the price of auto insurance not just for drivers in the city, but for those across the state of New York. The monetary consequence of the fraud totals about $200 million annually in premium increases for New York state drivers. In the city specifically, drivers pay premiums 272 percent above the state average.

According to the IRC, approximately 23 percent of the claims examined to compile data for the study involved some sort of fraud. Of that group, claims that originated in New York were four times more likely to include some suspicious activity.

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