Allstate Insurance continued its crackdown of insurance fraud in New York state to close out 2011. Many insurance companies have a big problem with insurance fraud because of the no-fault coverage issued in the state of New York, according to Insurance News Net’s “Allstate Files $1.1M Insurance Fraud Case in NY.” This most recent lawsuit for $1.1 million is against sixteen people accused of falsely running companies they said were owned by a medical doctor in order to submit false claims to Allstate. This is Allstate’s ninth insurance fraud lawsuit in New York this year and their thirty-sixth since 2007.
Unfortunately, no-fault auto insurance has been causing a fraud nightmare in the state of New York for years. Consumers in New York pay more for their auto insurance because there is so much fraud, dubbed a ‘fraud tax’ by some. An Allstate spokesperson urges New York lawmakers to enact and enforce regulation that will eliminate no-fault insurance or find a way to eliminate the fraud it is causing.
This most recent scheme involved multiple small companies and individuals sending medical claims and referrals in violation of the no-fault law. Everything was under the guise of a named medical doctor who does not really exist. Allstate’s Special Investigative Unit filed this lawsuit to recoup the more than $1 million it feels it lost. Allstate Insurance is joined by many other insurers, like Donegal Insurance, and state leaders in New York in their battle to reform the no-fault auto insurance system.
Written by Sara Smart
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