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Consumers Should Become Educated on Various Schemes to Help in the Fight Against Insurance Fraud

Superintendent of Insurance Gregory V. Serio today advised all New Yorkers to educate themselves and become familiar with the varying ways insurance fraud can be perpetrated in an effort to reduce fraud and minimize its impact.

"During this important week when the rights of consumers are being highlighted to promote "Consumer Protection Week,’ it is important to remind all New Yorkers that insurance fraud is a crime and we must become better educated to better protect ourselves from falling victim to insurance fraud," said Serio.

Insurance fraud victimizes every New Yorker, costing consumers billions of dollars in the form of increased insurance premiums and higher prices for goods and services. It is estimated that fraud costs as much as $1,650 per year for every household in New York State, well above the national average of $940.

As consumers, there are several common-sense steps you can take to help reduce fraud and minimize its impact.

Be an informed consumer - Don’t sign up for a type of policy or certain coverages that you are not sure you need. Take time to decide what’s right for you. Read your policy carefully before you sign. If you have questions, ask your agent or broker, or your insurer or contact Insurance Department’s Consumer Services Bureau.

Know Your Agent or Broker. Deal only with licensed agents and brokers. Agents and brokers must carry proof of licensure.

Where's the Proof? Pay your premium by check or a money order made out to the insurance company directly or to the agency—not to the individual agent or broker. Additionally, always request a receipt.

Where's the Policy? You should receive a copy of any type of insurance policy. If you do not receive it and your agent/broker does not provide a satisfactory explanation, contact the Insurance Department immediately. You may not have the insurance coverage you paid for.

Become educated on the different forms of insurance fraud. A driver and a body shop worker agree to inflate the auto damage claim and share the "profit." A homeowner falsely claims his home was burglarized and valuable items stolen. A doctor charges for services that were not provided. A driver and his co-conspirators stage accidents, while doctors and lawyers "handle" the subsequent medical claims and lawsuits. A worker fakes an injury on the job in order to collect workers’ compensation benefits.

If you suspect insurance fraud, you can report it to the New York State Insurance Department Frauds Bureau by calling the Frauds Bureau hotline at 1-888-FRAUD NY or submit a frauds report available on the Department’s Web site at All such matters are kept confidential.

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