Albany, NY (WiredPRNews.com) New York State Senator James Seward has sponsored two bills—one of which has already gained approval from the senate—that take aim at what has been characterized as rampant abuse of the no-fault New York car insurance system.
Both bills would deter residents from trying to collect on bogus or inflated auto insurance claims, although each does so in a different way.
SB 1685, which gained approval from the full senate on Tuesday and now goes to the house for consideration, would discourage would-be fraudsters from staging accidents in order to file for payouts to cover unnecessary expenses. It does this by establishing the staging of an accident as a crime that is considered a felony. For a first offense, a convicted person could get up to seven years’ jail time. If another party is seriously injured in the accident, the penalties escalate.
SB 2816, on the other hand, would make broader adjustments to the no-fault insurance system as a whole. It would do so by setting fee schedules for certain types of medical services, requiring health care providers to present documents verifying the necessity of treatments and extending the period that insurers have to investigate claims that appear to be fraudulent. This bill, however, still remains in the insurance committee, which it was referred to last month.
Studies have shown that many claimants in NY seek medical treatment that are of questionable necessity, and Seward has said that taken as a whole the NY fraud and abuse problem is adding hundreds of millions of dollars of additional costs to the state’s drivers.
To learn more about this and other NY insurance issues, readers can go to http://www.onlineautoinsurance.com/new-york/ where visitors will find informative resource pages about state law and other specifics to keep in mind when shopping for coverage.