Consumer alert: Staged car crash fraudsters make NY families pay $300 more annually on car insurance

New Yorkers pay 40 percent above the national average rate, forcing working families to choose between car insurance and essential expenses, such as groceries

Citizens for Affordable Rates (CAR) today issued a consumer alert about staged car crashes orchestrated by criminal fraud rings that are directly responsible for New York's crushing auto insurance costs. The alert includes a new fact sheet (attached) explaining how these organized schemes operate—and why Governor Kathy Hochul must act now to shut them down.

“Staged car crashes are organized criminal enterprises preying on hardworking New Yorkers and costing every driver an extra $300 a year in premiums,” said José Bayona, a CAR spokesperson. “We are issuing this urgent warning so consumers can protect themselves and understand why insurance costs are climbing so steeply.”

How Criminal Networks Are Exploiting New Yorkers:

• Crash-for-Cash Schemes: Criminals use "brake slamming" and "swoop and squat" tactics to cause deliberate collisions with innocent drivers.
• Medical Mills: Fraudulent clinics submit inflated medical bills — sometimes exceeding $50,000 per staged accident — padding their profits on your dime.
• Sham Lawsuits: Shady attorneys file bogus lawsuits to extract massive settlements from insurers, which are then passed directly to consumers.
• Organized Fraud Rings: Vulnerable individuals are recruited as pawns while criminal ringleaders rake in millions.

The Numbers:

• Staged crashes and inflated medical claims account for 75% of all insurance fraud cases in New York (NYS Department of Financial Services), adding an estimated $300 per driver per year.
• New York's Insurance Crisis: New Yorkers pay $4,031 annually for full coverage — nearly 40?ove the national average. 5.2 million residents live in areas where coverage is unaffordable, and 11% of drivers go uninsured.
• Fraudsters' Advantage: New York's no-fault law requires insurers to pay medical claims within 30 days, giving criminals a green light to exploit the system before investigations can catch up.

Families Are Paying the Price:

• Rising premiums force working families to choose between car insurance and other essential expenses, such as groceries.
• Small businesses and workers absorb crushing transportation costs that threaten livelihoods.
• Skyrocketing uninsured driving leads to more hit-and-run accidents, endangering everyone on the road.

Governor Hochul Must Act Now:

The Governor has the power to protect New Yorkers immediately by:

• Extending investigation periods for suspicious claims to catch fraudsters before they cash out.
• Cracking down on fraudulent medical clinics and attorneys who enable abuse.
• Imposing strict penalties on organized fraud rings with jail time and asset forfeiture.
• Creating specialized fraud prosecution units laser-focused on dismantling staged accident networks.

“Governor Hochul can end this crisis with the stroke of a pen,” CAR’s spokesperson added. “New York families are bleeding money every single month while Albany dithers. The Governor must act now and restore fairness to the auto insurance market.”

Staged accidents are an organized crime racket that steals from every driver in New York. Families deserve fair, affordable insurance – and they’re counting on Albany to act.

About Citizens for Affordable Rates (CAR)

Citizens for Affordable Rates (CAR) is a coalition of citizens, advocates, and organizations dedicated to tackling the root causes of high insurance premiums in New York. Through advocacy, education, and policy reform, CAR is committed to building an affordable and dependable insurance system for all.

To learn more about CAR, please visit: www.citizensforaffordablerates.org

To share your story in any language, please visit: https://www.citizensforaffordablerates.com/testimonials