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.