Insurance Fraud Rising In New York, Leading To Expensive Auto Insurance
Last Updated on January 20, 2026
Auto insurance fraud isn’t a victimless crime. When staged crashes, inflated injury bills, fake documents, and premium misrepresentation make it into the system, the cost pressure eventually shows up in higher premiums for everyday New York drivers.
New York’s own public reporting shows the problem is not theoretical: insurers reported 44,361 suspected motor vehicle insurance fraud incidents in 2024 to the New York State Department of Financial Services (DFS) Insurance Frauds Bureau, and suspected no-fault fraud reports rose from 33,646 (2023) to 38,846 (2024). Source: the NYS Division of Criminal Justice Services (DCJS) Motor Vehicle Theft and Insurance Fraud Prevention Program annual report (2024 MVTIFP Annual Report).
Nationally, the NAIC notes that insurance fraud raises costs for consumers and cites an FBI estimate that fraud can add $400–$700 per year to the average family’s premiums (NAIC: Insurance Fraud). Exact impacts vary by driver, location, and insurer—but the direction is consistent: more fraud usually means more rate pressure.
At a Glance
- Fraud Raises Everyone’s Costs: Insurers price for expected losses, so fraudulent claims and misrepresentation can translate into higher premiums at renewal.
- No-Fault Fraud Is a Major Target: New York reporting shows suspected no-fault fraud accounts for a large share of reported motor vehicle fraud incidents.
- Small Steps Reduce Big Risk: Document crashes, avoid being steered to providers, and keep your policy details accurate to prevent claim complications.
- You Can Still Control Your Price: Shopping carriers, reviewing deductibles, and using legitimate discounts can help offset rate pressure in high-fraud areas.
- Why Auto Insurance Fraud Pushes Premiums Higher
- What New York’s Recent Fraud Data Shows
- Common Auto Insurance Fraud Schemes in New York
- How Fraud Is Investigated and Prosecuted in New York
- How to Protect Yourself After a Crash
- If Your Premium Is Rising, Here Are Practical Options
- How to Report Suspected Insurance Fraud in New York
- FAQs on New York Auto Insurance Fraud
Why Auto Insurance Fraud Pushes Premiums Higher
Auto insurers price policies based on expected losses (claims), expenses, and required reserves. When fraudulent claims inflate losses—especially repeated “small” claims that slip through—carriers respond through underwriting and pricing changes at renewal.
To see how insurers generally approach pricing changes, read our explainer on why car insurance rates increase. Fraud is only one driver of rate changes, but it’s a major cost-multiplier in dense, high-claim areas.
What New York’s Recent Fraud Data Shows
New York publishes multiple fraud-related data sets. One of the most useful for drivers is the DCJS MVTIFP reporting, which summarizes suspected motor vehicle insurance fraud incidents reported to DFS—including categories like no-fault, collision damage, falsified insurance cards, and more (DCJS MVTIFP 2024).
Recent Reported Trend (2023–2024)
| Metric | 2023 | 2024 |
|---|---|---|
| Suspected Motor Vehicle Insurance Fraud Incidents Reported to NY DFS | 38,270 | 44,361 |
| Suspected No-Fault Fraud Reports | 33,646 | 38,846 |
Source: DCJS Motor Vehicle Theft and Insurance Fraud Prevention Program annual reports (2023 and 2024).
Common Auto Insurance Fraud Schemes in New York
Fraud ranges from organized rings (staged crashes and coordinated “treatment” billing) to everyday misrepresentation (garaging a car in a different ZIP code, hiding a household driver, or falsifying mileage). The no-fault system can also attract “runner” activity—third parties who steer claimants to specific clinics or providers for unnecessary or exaggerated treatment.
Fraud Red Flags Drivers Can Actually Spot
| Scheme | What It Can Look Like | Red Flags | What To Do |
|---|---|---|---|
| Staged “Swoop and Squat” Crash | Multiple cars coordinate to force a rear-end collision | Sudden braking, cars that “box you in,” a vehicle speeds off | Call police, document the scene, avoid on-the-spot “helpers” |
| Inflated Injury/No-Fault Billing | Excessive treatment for minor impact claims | Pressure to attend a specific clinic; treatment starts immediately and escalates fast | Choose your own provider; keep records; report suspicious steering |
| Fake/Altered Documents | Counterfeit insurance cards, registrations, repair invoices | Documents that look “off,” missing insurer contact details, mismatched VIN/info | Verify with your insurer; share concerns with the adjuster |
| Premium Misrepresentation | Wrong garaging address, hidden drivers, understated mileage | Someone suggests “just use a different address” to save money | Don’t do it—coverage can be denied or rescinded |
For an example of how staged accident setups work (and prevention tips), see the National Insurance Crime Bureau’s overview of staged auto accident fraud (NICB: Staged Auto Accident Fraud).
Quick tip: After a crash, be cautious of unsolicited “runners” offering to arrange medical care, towing, or attorneys. You can choose your own providers and tow company—don’t feel pressured on the scene.
How Fraud Is Investigated and Prosecuted in New York
Insurers typically route suspicious claims to Special Investigation Units (SIUs) and may use tools like recorded statements, document verification, medical reviews, EUOs (examinations under oath), and coordination with law enforcement. New York’s DFS also operates the Insurance Frauds Bureau and accepts consumer fraud reports.
New York also tracks felony insurance fraud arrests under Penal Law Article 176. DCJS’ “Felony Insurance Fraud Offenses” annual reporting provides statewide arrest counts over time (2024 Felony Insurance Fraud Annual Report (DCJS)). (This report is broader than just auto claims, but it reflects ongoing enforcement activity.)
Note: Insurance fraud can be charged as a misdemeanor or felony depending on the conduct and dollar amount. For a plain-language summary of NY insurance fraud degree thresholds, see this Penal Law overview (FindLaw: NY Penal Law Article 176).
How to Protect Yourself After a Crash
- Call police and document the scene: Photos of damage, plates, driver’s licenses, and the scene help prevent later “story changes.”
- Get independent witness info when possible: Names and numbers can be valuable if liability is disputed.
- Seek medical care based on need—not pressure: If you’re hurt, get checked out. But avoid being steered into unnecessary treatment plans.
- Communicate promptly with your insurer: Late reporting can complicate legitimate claims and create opportunities for bad actors to insert themselves.
Quick tip: If anyone encourages you to exaggerate injuries, “borrow” a policy, or list a different garaging address, don’t do it. Misrepresentation can trigger claim denial, policy cancellation, and potential criminal exposure.
If Your Premium Is Rising, Here Are Practical Options
If fraud is pushing costs up in your area, you may still be able to control your personal price with smart coverage choices and shopping habits. Start with our guide on what to do if your car insurance feels unaffordable, then review these fundamentals:
- Compare quotes at renewal: Pricing varies widely by carrier and underwriting appetite.
- Review deductibles: A higher deductible can reduce premium, but only choose what you could realistically pay after a loss.
- Check discounts and policy details: Multi-car, safe driver, usage-based programs, and payment options can matter.
- Make sure your policy matches your reality: Accurate garaging address, drivers, and mileage help avoid claim issues later.
For more ways to reduce costs without cutting corners, see our step-by-step guide to lowering your New York car insurance cost.
How to Report Suspected Insurance Fraud in New York
If you suspect fraud (for example, staged accident behavior, suspicious medical steering, or fake documents), you can report it to the New York State Department of Financial Services Insurance Frauds Bureau. DFS lists multiple options, including an online form and the Insurance Fraud Hotline at (888) 372-8369 (DFS: Report Insurance Fraud).
Disclosure: This article is for general informational purposes and is not legal advice. Claim handling and fraud enforcement can vary based on facts, policy language, and location within New York.
Need a refresher on the coverage New York drivers are required to carry? Review New York auto insurance requirements before you shop or change your policy.