Op-Ed | A strong anti-fraud agenda will support a more affordable New York

Across New York, insurance fraud is evolving at a faster rate than ever before. Schemes are becoming increasingly elaborate, and criminals more sophisticated. Our state’s anti-fraud laws need to keep up. If they don’t, New Yorkers will pay the price — an even higher cost-of-living in one of the nation’s already most expensive states.

Data from the National Insurance Crime Bureau (NICB), the country’s leading voice on combatting and preventing insurance crimes, indicates that reported instances of fraud are on the rise. The number of reported claims containing indicators of suspected fraudulent activity has increased substantially year over year. In 2024, the NICB catalogued over 180,000 questionable claims, a 13% increase from the more than 159,000 submitted the previous year.

That fraud spans multiple lines of insurance, and across economic sectors, criminals follow a similar playbook. In one common scheme, they’ll intentionally cause an accident and exaggerate (or fake) an injury. They might pull out in front of your car on the highway and slam on their brakes, purposefully attempting to cause an accident. When you inevitably rear-end them, they’ll submit a bogus insurance claim and fight for a profitable payout despite not actually being hurt.

According to the New York State Department of Motor Vehicles, scams like these are increasing throughout the Empire State. Today’s criminals don’t stop with orchestrating car accidents, they’re more devious than that. They regularly work with complicit medical providers who artificially inflate medical bills in the name of “treating injuries” and “providing care.” Unethical attorneys then use these healthcare bills and pursue massive payouts from insurers. Once the case settles, everyone involved in the scheme gets paid while innocent New Yorkers are left footing the bill for criminal activity.

These schemes exacerbate the ongoing affordability crisis. The FBI has found that, over the last decade, fraud has imposed an invisible tax on American households. It costs the average family between $4,000 and $7,000, straining budgets which have already been tightened by other cost drivers. Those are real dollars siphoned away from communities every day.

New York ranks 45th in the nation in terms of cost of living and affordability, and 49th in economic opportunity. Insurance fraud only makes things more expensive. The NICB has determined that staged crashes, for instance, can raise the average auto premium $100 to $300 each year. This makes cars more expensive to drive, and the cost-of-living increases as a result.

Fortunately, there are concrete solutions that our legislators can implement to combat New York’s major fraud issues. We can discourage would-be criminals by making it illegal to stage an accident. This is just common sense. Yet, as of today, it’s not a felony to intentionally cause a construction site “accident” for the purpose of filing a fraudulent insurance claim. A bill introduced by Assembly Member David Weprin and State Sen. Leroy Comrie — both Queens Democrats — would change that, making the offense a class E felony.

Criminals often use stolen credit cards or false identities to buy auto insurance, then stage crashes to obtain a payout from those policies. A bill from State Sen. Jamaal Bailey, a Bronx Democrat who chairs the Senate’s insurance committee; and Assembly Member Gary Pretlow would allow insurers to retroactively cancel those fraudulently obtained policies, helping stop staged accidents while still protecting coverage for innocent bystanders.

Just as importantly, lawmakers can strengthen the investigative tools needed to catch fraud early and reduce penalties for insurance companies that diligently investigate the legitimacy of a claim. Comrie’s S5343 would do just that. Currently, the insurance industry has a narrow window of time — 30 days — to determine whether a claim contains fraudulent activity. Given the ever-increasing number of questionable claims and the growing sophistication of criminals, that’s not enough time. Insurance companies need adequate time to investigate claims and catch fraud before it costs New Yorkers.

Elected officials, law enforcement, and the insurance industry must work together to advance a strong anti-fraud agenda. We can’t afford to let weak laws give criminals the upper hand. As scammers become more coordinated in defrauding businesses, draining our economy, and driving up costs for working families, our response must be just as coordinated. That means giving law enforcement, insurance companies and regulators the proper tools to combat fraud. We can either update our laws now or allow criminals to keep exploiting the gaps. The choice is clear — it’s time to act.

Cassandra Anderson is president of the New York Insurance Association, the country’s oldest state insurance trade organization that has served the property and casualty insurance industry for more than 140 years. Howard Handler is senior director of strategy, policy, and government affairs for the National Insurance Crime Bureau, the nation’s leading not-for-profit organization exclusively dedicated to combatting and preventing insurance crime.