May 20, 2011

New York residents paying for crime in Car Insurance

New York residents who own cars are being forced to pay for crimes that they never committed. Because of an increase in fraud that is connected to no fault insurance claims, people in New York are now having to pay even more for their insurance. They are having to pay, quite literally, for the actions of others. This is what makes this situation so difficult for those who are involved. They feel that there is nothing that they can do. They feel that the situation is completely unfair, and they are right. Something needs to be done to stop this turn of events right away before more innocent people are forced to spend their money.

On one hand, it is clear why this kind of thing has to happen, at least from an insurance standpoint. The companies need to charge more because they are beginning to lose money with all of the fake claims that are being filed. This is how insurance has always worked and no one should be surprised. This is how it works if someone gets in an accident. They have to pay more, later on, to make up for the money that they cost the company. This is very different because it involves fraud, of course, but the consequences, from a financial standpoint, have to be the same.

What this means, then, is that action needs to be taken to stop people from committing fraud in the first place. Action does not need to be taken against the insurance companies, save to say that they should work harder to find cases of fraud and refuse to pay them. If they could do this, they would save money, helping to drive the prices down for everyone else. This would be very beneficial, but it is probably a lot harder to do in practice than it sounds. This is, after all, a rather complicated business. No one would want companies to go too far the other way and to start denying claims from people who really need the help.

It is difficult to say what needs to be done to stop the fraud. Concentrating efforts to close down crooked clinics and repair shops would be a good start. The people working at these places could then be banned from working in that profession again. That would stop them from setting up another business after one was closed. They would not be able to help the fraud happen multiple times.

The idea of making it so that people who are convicted of fraud cannot get insurance again is a good one, and that should be enforced at the very least. If people have broken the law in the past, they have given up their ability to be trusted. They have given up their right to have insurance at all. If they were denied it, this would keep them from doing the same thing again in the future. It would also act as a deterrent that could keep others from trying fraud as well.

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