New York drivers pay among the highest car insurance rates in the nation. By some estimates, the bills average $4000.00 a year per household, and as much as $7000.00 in some areas, according to the state Department of Financial Services (DFS). Citizens for Affordable Rates (CAR) is waging a media campaign to bring attention to the issue and to increase pressure on state lawmakers to pass reforms.
The group ran a TV ad during the Super Bowl that depicted Buffalo Bills fans “We get it. People are sadden angry and frustrated with the Bills.” The ad goes on to say “we’re talking of course about New York’s crushing car insurance bills.”
CAR used the high-profile ad to show how fraud is a chief contributor to the state’s high rates. Spokesperson James Freedland described how a number of people get paydays when accidents are staged, “for example, merging onto I-81, cutting in front of another driver, and then suddenly slamming on the brakes. And because of the way New York's no-fault system operates, that can lead to a quick insurance payout, even though the car crash was planned or staged.”
He further charged some lawyers and medical offices are in collusion, often billing multiple times based on the same accident. The added insurance payouts have contributed to double-digit car insurance rate increases in recent years. The State DFS identified more than 1700 staged crashes in 2023, while insurance carriers reported 38.270 cases of suspected motor vehicle insurance fraud. "According to the Insurance Information Institute, staged crashes and associated insurance fraud inflate everyone’s premiums by as much as $300 per year on average," said information from DFS.
The group is working with Governor Kathy Hochul on a package of bills to go after fraud rings.
“(The package) closes loopholes that let people collect big payouts, even if they were mostly at fault or breaking the law,” Freedland added. “So by targeting fraud at those points, we can lower insurance premiums for everyone. We can reward safe drivers and also return any excess insurance profits directly to the people, to the policyholders.”
The bills also call for stronger tools for law enforcement to stop fraud, and more oversight of medical providers to close loopholes that have allowed the illegal payouts. That can lead to hundreds of dollars in savings which, he notes, “could go towards groceries, rent, bills, mortgage payments, medicine, you name it. And for small businesses, trucks and small fleets are facing higher costs, which can limit hiring, it can raise prices. So it has a ripple effect on the entire economy in all parts of the state.”
Freedland added residents will see more ads urging residents to tell lawmakers to pass the bills, “their local officials, assembly members, senators, and the governor is supportive, but it doesn't hurt (to contact her office). I think it's best to notify as many elected officials as possible to make them super aware that this is a real problem, that this is part of the affordability crisis.”
