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4/19/2011 - Auto insurance fraud may become felony in New York

A New York bill would make auto insurance fraud a felony.

Legislators are trying to pass a bill that would further clamp down on individuals who commit auto insurance fraud.

The New York Senate passed a bill that would make intentionally getting into an auto accident, or staging one, a felony.

In a statement, Senator James Seward, chairman of the Senate Insurance Committee, said he hopes this legislation will reduce auto insurance costs for motorists who wind up footing the bill.

"Innocent people should not be made unwitting pawns in a criminal enterprise," Seward said.

Auto insurance fraud drives up costs, but it can sometime cost people's lives, which is what spurred Seward to sponsor the bill. In 2003, a 71-year-old woman died after being killed in a staged accident through no fault of her own.

The introduction of no-fault insurance in the state - in which insurance companies directly pay consumer regardless of who's at fault in an accident - has led to a great deal of fraud. The New York Insurance Department says no-fault policies represented 53 percent of suspected fraudulent reports.

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