(The Center Square) — New York Gov. Kathy Hochul’s efforts to crack down on auto insurance fraud and staged accidents are facing resistance from religious leaders, who claim it would prevent those who are injured from seeking justice.
Hochul’s plan to tackle fraud, some of which requires legislative approval, calls for strengthening state regulations, ramping up investigations of alleged insurance fraud, and targeting physicians who provide bogus diagnoses for victims of staged crashes. The plan won Hochul praise from business groups and fiscal watchdogs who say fraud is rampant in New York’s insurance sector.
But a coalition of religious leaders, calling itself Concerned Clergy of New York State and New York City, is asking Hochul to strip the bill of provisions they claim would “deny victims the justice they deserve.”
“In our congregations, we walk alongside families who are already living paycheck to paycheck,” they wrote in a letter to the governor. “When injured members of our communities are denied a fair path to recovery, families fall behind on rent, delay necessary medical care, and are pushed into financial crisis.”
The group said members of the clergy are also “deeply concerned” that this proposal “creates an uneven playing field” by limiting accountability. They say the changes, if approved, would “protect large insurance companies and corporate platforms while shifting the financial consequences of injury onto victims, their families, public hospitals, Medicaid, and taxpayers.”
“The cost of injury does not disappear; it is passed on to the public and absorbed by our parishioners and communities we serve,” the group wrote.
New Yorkers pay some of the highest car insurance rates in the nation – totaling just over $4,000 annually on average, nearly $1,500 above the national average, according to state and federal data. Government and industry groups say insurance rates are driven up by a combination of fraud, litigation, legal loopholes and enforcement gaps.
In 2023, there were 1,729 staged crashes in New York, which ranks second highest in the nation for incidents of staged fraud, according to the latest data from the New York State Department of Financial Services.
Business groups have called New York legislative leaders to support Hochul’s plan to update New York’s liability laws. They say the changes wouldn’t weaken protections for drivers and bystanders, but would prevent fraud and profiteering while preserving coverage for medical bills and lost wages.
“New York’s current rules leave the system vulnerable to inflated claims and opportunistic lawsuits that raise costs for everyone,” they wrote. “Bringing our standards closer to those used in peer states would reduce litigation while preserving access to the courts for people who suffer serious, legitimate injuries.”
A February poll found 86% of New Yorkers back the governor’s proposed reforms to the state’s auto insurance system, while 75% of the more than 1,000 voters surveyed say auto insurance costs are a “financial burden” on their household.
