Auto Insurance Fraud in New York and How It Raises Your Premiums

Last Updated on October 21, 2026 by James Shaffer

Auto insurance fraud raises what honest New York drivers pay because insurers build expected claim costs, including fraudulent ones, into their rates. Insurers reported 43,811 suspected motor vehicle insurance fraud incidents to the New York State Department of Financial Services (DFS) in 2025, and most of them involved no-fault (PIP) claims. The state changed several laws in 2026 to go after staged crashes and the costs that feed into premiums.

Nobody can tell you exactly how much of your own premium comes from fraud. State officials have cited estimates that staged crashes and related fraud add as much as $300 a year to the average driver’s premium, and the NAIC points to an FBI estimate that insurance fraud of all kinds costs the average family $4,000 to $7,000 in higher premiums over 10 years (NAIC: Insurance Fraud). Both are broad estimates, not a line item on anyone’s bill.

Why Auto Insurance Fraud Pushes Premiums Higher

Insurers set rates from the claims they expect to pay plus their expenses. They can’t separate every fraudulent claim from the real ones, so the cost of the ones that get paid ends up in the loss data used for future rate filings. Investigating suspicious claims costs money too, and that also shows up in what policyholders pay.

Rates are also priced by territory. If an area has more claims, or more expensive ones, drivers there can see higher premiums even with a clean record. That’s one reason fraud tends to hit dense parts of New York City harder. Fraud is only one factor among many, and our explainer on why car insurance rates go up covers the others, such as repair costs and medical costs.

The Governor’s office has said New Yorkers pay just over $4,000 a year on average for car insurance, about $1,500 more than the national average. That’s a statewide average cited by the state, not a quote, and what you pay depends on your driving record, vehicle, location, coverage, and which insurer you choose.

What New York’s Latest Fraud Data Shows

The DFS Insurance Frauds Bureau publishes its numbers in the Department’s annual Consumer Protection and Financial Enforcement Division report for 2025. Insurers are required to report suspected fraud to the Bureau, so these figures are suspected cases referred by insurers, not proven fraud.

Suspected Motor Vehicle Fraud Reports, 2024 vs. 2025

Report Category	2024	2025
No-fault insurance	38,846	36,835
Auto collision damage	2,377	3,401
Auto miscellaneous	2,350	2,665
Auto theft	382	412
Auto vandalism	161	250
Auto fraudulent bills	59	108
Auto fire	65	55
Auto ID cards	39	52
Theft from auto	82	33
Total motor vehicle reports	44,361	43,811

A few things stand out. No-fault reports fell about 5% in 2025 but still made up roughly 72% of all fraud reports the Bureau received across every line of insurance. Collision damage reports rose by more than 1,000. And the longer trend points one way: the 2025 total is about 80% higher than the 24,238 motor vehicle reports insurers filed in 2020, according to the state.

The Bureau opened 243 investigations and made 169 arrests in 2025 across all types of insurance fraud, down from 316 investigations and 227 arrests in 2024. Staged crashes are a big part of the picture. State officials have cited 1,729 staged crashes in New York in 2023, the second-highest number in the country.

Common Auto Insurance Fraud Schemes in New York

Fraud ranges from organized rings that stage crashes and bill for treatment nobody needed, to individual drivers misstating facts to get a lower premium. New York’s no-fault system pays medical bills and lost wages without first deciding who was at fault, which makes it a target for “runners” who steer crash victims to particular clinics or lawyers, sometimes for kickbacks.

Recent cases show how this looks on the street. In 2025, the Insurance Frauds Bureau and the NYPD’s Fraudulent Collision Investigation Squad arrested the organizers of a staged accident ring after one crash on the Belt Parkway was caught on dashcam video. In October 2026, the state announced 16 arrests from joint State Police and DFS investigations, including a Bronx crash allegedly staged to run up more than $70,000 in medical bills.

Fraud Red Flags Drivers Can Spot

Scheme	Red Flags	What To Do
Swoop and squat or panic stop	A car cuts in and brakes hard for no reason; another car boxes you in or speeds off	Call police, take photos and video, note plates and witnesses
Drive down	A driver waves you into a turn or lane, then pulls forward into you	Tell police and your insurer exactly what happened, including the wave
Inflated no-fault billing	Strangers at the scene push a specific clinic or lawyer; treatment escalates fast after a minor impact	Pick your own doctor and keep copies of every bill
Fake documents	Insurance cards, registrations, or repair invoices with missing or mismatched details	Ask your insurer or adjuster to verify them
Premium misrepresentation	Someone suggests using an out-of-state or relative’s address, or leaving a driver off the policy	Don’t do it; it can lead to a denied claim or canceled policy

The National Insurance Crime Bureau has a plain-language rundown of how staged and caused accidents work, including the freeway version of swoop and squat, where extra cars keep the victim from changing lanes.

What New York Changed in 2026

In January and February 2026, Governor Hochul proposed a package aimed at fraud and auto insurance costs. Several pieces passed in the state budget for fiscal year 2027. According to DFS’s July 1, 2026 announcement, the enacted budget:

• Expands the definition of a fraudulent insurance act so prosecutors can seek criminal penalties against anyone who organizes or helps stage an accident, not only the driver.
• Limits damages for drivers who were breaking the law at the time of the crash, such as uninsured or drunk drivers or someone committing a felony.
• Tightens the serious injury threshold, so pain and suffering damages are limited to people who can objectively show a serious injury.
• Limits large damage awards for drivers who were mostly at fault for the crash.
• Requires insurers to get DFS’s prior approval before raising private passenger auto rates.

DFS then issued Circular Letter C32026-01, telling insurers to reflect these reforms in their pricing models for pending and future rate filings. Our guide to New York’s 2026 auto insurance reforms covers each change and when it applies. In September 2026, DFS proposed a regulation to carry out the prior approval rule. Under the current rule, insurers can take up to two overall rate increases without approval as long as the combined effect stays at or under 5%. DFS says the law and regulation take effect on November 27, 2026. The proposal also requires insurers to tell policyholders about certain rate decreases and explain why.

On enforcement, the Governor directed DFS, the State Police, the DMV, and the Division of Criminal Justice Services to coordinate on auto fraud, and a task force now pairs State Police investigators with Insurance Frauds Bureau staff. None of this guarantees a lower premium for any particular driver. Rate changes depend on each insurer’s filings and DFS review.

How Fraud Is Investigated and Prosecuted in New York

Insurers send suspicious claims to their Special Investigations Units (SIUs), which may take recorded statements, check documents, order medical reviews, or require an examination under oath. Cases can then go to the DFS Insurance Frauds Bureau, the State Police, the NYPD, and county district attorneys.

Under the Penal Law, committing a fraudulent insurance act is insurance fraud in the fifth degree, a class A misdemeanor, and higher degrees are felonies based on the dollar amounts involved. Intentionally causing a collision to commit insurance fraud is a separate crime, staging a motor vehicle accident in the second degree, a class E felony. The Division of Criminal Justice Services also tracks statewide felony insurance fraud arrests each year.

How to Protect Yourself After a Crash

1. Call the police, especially if anything about the crash seems off. A police report makes it harder for anyone to change the story later.
2. Take photos and video of the cars, plates, damage, and scene, and count how many people were in the other car.
3. Get names and phone numbers of independent witnesses. Be wary of a witness who shows up out of nowhere to back the other driver.
4. Turn down people at the scene who offer to arrange a tow, a clinic, or a lawyer. You can choose your own.
5. Get medical care if you’re hurt, from a provider you pick, and keep copies of bills and records.
6. Report the crash to your insurer promptly. No-fault claims have filing deadlines, and late reporting can complicate a legitimate claim.

What You Can Do About a Rising Premium

You can’t control fraud where you live, but you can control some of what goes into your own price. If the bill has become hard to manage, start with our guide on what to do if you can’t afford car insurance anymore, then look at these basics:

• Compare quotes at renewal: Insurers price the same driver differently, so checking a few carriers can turn up a lower price.
• Review your deductibles: A higher collision or comprehensive deductible can lower the premium, but pick one you could actually pay after a loss.
• Ask about discounts: Multi-car, defensive driving course, and usage-based discounts vary by insurer.
• Keep your policy accurate: The right garaging address, every household driver, and honest mileage keep your claims from being questioned later.

For more ideas, see our guide to lowering your New York car insurance cost. Before you cut coverage, check the New York auto insurance requirements so you stay above the legal minimums.

How to Report Suspected Insurance Fraud in New York

DFS’s Insurance Frauds Bureau takes reports from the public. According to the DFS Report Insurance Fraud page, you can:

• Call the Insurance Fraud Hotline at (888) FRAUDNY, which is (888) 372-8369.
• Submit the online suspected fraud report form.
• Mail the Report Fraud Form to the New York State Department of Financial Services, Insurance Frauds Bureau, One State Street, New York, NY 10004.
• Fax the completed form to (212) 709-3555.

DFS says reports are kept confidential. Stick to facts you saw or have documents for: dates, places, names, plate numbers, and copies of photos or bills. You can also report to the National Insurance Crime Bureau at 800-835-6422, and tell your own insurer if the fraud involves your claim.

Note: This article is for general informational purposes and is not legal advice. Claim handling and fraud enforcement depend on the facts, your policy language, and where in New York the crash happened.

FAQs on New York Auto Insurance Fraud