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Officials believe fraud caused New Yorkers' auto insurance premiums to rise

Posted On Tue, April 19, 2011

New York State auto insurance rates increased last year and officials believe the hike was largely due to the prevalence of motorists faking accidents.

The New York Daily News reported the state's motorists saw a 4 percent increase in insurance premiums. Aware of the increase, legislators say they intend to clamp down on perpetrators by making fraudulent activity a felony.

In an interview with the paper, Charles Hynes, Brooklyn's district attorney and member of the advocacy group Fraud Costs NY, said the current penalties aren't a strong enough deterrent.

"There is nothing more frustrating than closing down a criminal 'medical mill' only to see the same players open with a new name a few weeks later," Hynes said.

According to the advocacy group's website, New Yorkers pay the third highest premiums in the nation as the average claim has increased $3,075 since 2004.

Nationwide, auto insurance rates have increased but only marginally. According to the Bureau of Labor Statistics' Consumer Price Index report, the average price for a standard auto insurance policy increased one-tenth of 1 percent over the past two months. 

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