Report Finds That “Staged” Accidents, Meant to Bilk Insurance Companies, Are on the Rise

As the US economy has gradually deteriorated, the number of fraudulent auto accidents, aimed at bilking insurance companies, has sharply increased, according to a report from the National Insurance Crime Bureau.

According to the bureau, these “staged” automobile accidents often involve criminal gangs that draw unsuspecting innocent, insured motorists into a collision. Suspected fake accident claims are said to have increased 46 percent from 2007 through 2009. Although accident claims have risen, the overall rate of bodily injury and personal injury protection claims has fallen.

The states that produced the most alleged “staged” accidents over the two-year reporting period were Florida, 3,006 and New York. The worse cities for suspected staged accidents were New York City, Tampa, Miami, Orlando and Houston.

No-Fault Auto Insurance Was Focus Insurance Fraud Summit

At a recent day-long conference on insurance fraud in New York, New York State Insurance Department Superintendent James Wrynn emphasized the importance of legislative reforms to fix what he calls, a broken no-fault system.

The Superintendent outlined his department’s approach to tackle the problems with the no-fault system: aggressively investigating no-fault fraud cases with the expectation of prosecution, major revisions to no-fault regulation 68, and legislative reforms.

The event was co-sponsored by the New York Insurance Association (NYIA) and the National Insurance Crime Bureau (NICB). Panel discussions addressed no-fault fraud, rate evasion, Internet policies, premium fraud and the law enforcement response to each.

Insurance Company Won’t Cover Fairfield Resident Who Stabbed Neighbor

A Superior Court judge has ruled that a Fairfield lawyer, who fatally stabbed his disabled neighbor three years ago because he erroneously believed the man had molested his daughter, won't get help from his insurance company in the lawsuit filed against him by the victim's family.

In a 19-page decision, the judge stated that USAA Casualty Insurance Co. is not responsible for any civil verdict against Jonathon Edington because of his insurance policy's exclusion against intentional or criminal acts.

In August 2007, Edington pleaded guilty to first-degree manslaughter and was sentenced to 20 years in prison, suspended after he serves 12 years, followed by five years probation, for fatally stabbing 59-year-old Barry James on August 28, 2006.

New York Insurance Regulator Outlines Anti-Fraud Legislative Concepts

The New York State insurance superintendent said, as part of an effort to address no-fault insurance fraud, that he is supporting the enactment of a measure requiring mandatory arbitration for no-fault claims under $5,000.

Superintendent James Wrynn, said there is not a proposed bill on mandatory arbitration yet, but that talks with legislators have been positive.

Superintendent Wrynn said that requiring mandatory arbitration will decrease the number of overall no-fault cases and send a message regarding the direction the state is going in combating fraud.

Aside from the fraud-fighting aspect of sending such cases to arbitration, Superintendent Wrynn said the plan would also free up court resources.

Connecticut Insurance Department Recovers More Than $1M for Connecticut Drivers

Connecticut Insurance Commissioner Thomas R. Sullivan has announced that the Connecticut Insurance Department's Consumer Affairs Unit (CAU) has recovered $1,046,798.32 on behalf of consumers in the first quarter of 2010. Each quarter, CAU handles an average of 1600 complaints varying in complexity and relating to various product lines. This quarter, the top three complaint areas were accident and health insurance (40 percent), auto insurance (21 percent) and homeowners insurance (nine percent) complaints.

Not all submitted to the department are subject to recovery. This quarter, 203 complaints resulted in recovery dollars to consumers.

Complaints are made in five categories, according to the department: "marketing and sales," "premiums and ratings," "underwriting," "unfair claim practices," and "other."

Each quarter, the CAU analyzes the complaints received and pays particular attention to trends that may affect consumers. These trends are shared with enforcement, licensing, and market conduct units within the department and are used to continuously monitor and regulate the entire industry and protect consumers.

Federal Flood Insurance Program Extended!

The news that homeowners insurance providers and property owners in both New York and Connecticut had been hoping for was handed down last week when legislation that would enable an extension of the federally funded flood insurance program made it through the Senate after numerous hurdles.

Reuters reports that on Wednesday Democrats were finally able to garner the amount of votes necessary to pass the bill.

Around 1,400 homes in flood-prone areas, including New York and Connecticut have been unable to close due to the disruption of the flood insurance program. The program closed on March 28, making it impossible for new flood insurance to be written for homeowners. 

The Northeast has been particularly hard hit by severe rainfall and flooding in the last month and New York, among other states, was declared a federal disaster area. Individual Assistance Programs were made available to affected homeowners, renters, and businesses in the flood areas.

Geico May Not Be Your Best Choice For Affordable Connecticut Car Insurance

Geico may be known as the auto insurance company with clever television ads featuring a talking gecko and sensitive cavemen, but in Connecticut, the company is known for a laundry list of infractions, according to Connecticut Insurance Commissioner Thomas Sullivan who recently announced that several Geico units had been fined a total of $177,500 for a laundry list of infractions.

Four Geico subsidiaries had been cited for improper rating, claim delays, loss of use, and using unlicensed adjusters among other violations.

While the violations varied by subsidiary, most did not comply with state law requiring that optional coverage for safety glass repair or replacement be offered at all deductible levels. The Connecticut Insurance Department also found Geico using unlicensed insurance adjusters.

Other violations included instances where units did not include in their settlements the amounts attributed to an insured's inability to use his property, which is commonly referred to as "loss of use."

"Connecticut statutes are in place to protect consumers, and violations of these laws are unacceptable." Sullivan said in a statement. "We will continue to scrutinize companies in this industry to ensure they are committed to conducting business within the boundaries of our insurance laws."

To find the best Connecticut car insurance, contact the professionals at CTNY Insurance. They shop around for the best insurance rates, so you don’t have to.