Insurance Scam New York: What You Need to Know

In New York, insurance scams can be a real problem. The state's insurance department received over 10,000 complaints about insurance scams in 2020 alone.

The most common types of insurance scams in New York include fake health insurance plans and overpriced auto insurance policies. These scams often target vulnerable individuals, such as the elderly and low-income families.

New Yorkers can protect themselves by researching insurance companies thoroughly and being cautious of unsolicited phone calls or emails. They should also be wary of policies that seem too good to be true.

The New York State Department of Financial Services (DFS) is responsible for regulating and monitoring the insurance industry in the state.

In New York, insurance scams can take many forms. One common scam is inflated claims, where body shops enhance existing damages or conspire with adjusters to inflate the repair estimate.

Be sure to carefully review repair estimates and claims to avoid falling victim to this scam. Don't allow high-pressure salesmanship to persuade you to sign up for a type of policy or certain coverage 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.

Insurance fraud is a crime that victimizes every resident of New York State, costing consumers millions of dollars in increased premiums and higher prices for goods and services. The exact cost of insurance fraud is difficult to estimate because much of it goes unreported.

Insurance fraud takes many forms, including inflated auto damage claims, false home burglary claims, and billing for services not provided. This type of crime is not just a problem for insurers, but also for honest consumers who end up paying the price.

A driver and a body shop worker may agree to inflate an auto damage claim and share the "profit." This is just one example of how insurance fraud can occur.

Insurance fraud can also involve staging a fake accident, with unscrupulous doctors and lawyers helping to "handle" associated medical claims and lawsuits. This type of fraud can be particularly damaging, as it involves multiple parties working together to deceive insurers.

Here are some examples of insurance fraud:

Deal only with licensed agents and brokers. They must maintain proof of being licensed. Ask to see it. This is crucial to avoid being victimized by unscrupulous agents or brokers.

To ensure you're not being scammed, review your "Explanation of Benefits" statement thoroughly after receiving medical or dental treatment. Check for services that were not rendered or for dates on which you were not treated. Contact your insurer immediately if you feel there are discrepancies.

Be cautious of scammers who threaten to cancel your Medicaid or other health coverage unless you provide hundreds of dollars to reinstate or continue benefits. Don't fall for false offers of generosity that lure you into providing personal information. Always contact the Office of the Attorney General (OAG) if you suspect a scam.

When you receive a medical or dental treatment, you'll get an "Explanation of Benefits" statement that lists the services for which benefits have been paid.

Review this statement thoroughly to ensure you're not being billed for services that weren't rendered or for dates when you weren't treated.

Check carefully to confirm you weren't billed for more expensive procedures than were actually provided, a practice known as upcoding.

Health care fraud translates into billions of dollars a year, resulting in higher premiums and increased costs for goods and services for all consumers.

If you suspect fraud, contact the Department of Financial Services at (800) 342-3736. An investigator will contact you for details and the matter will be kept confidential.

Getting a copy of your policy is crucial to ensure you have the coverage you paid for. You should receive a copy of any type of insurance policy within a reasonable period after your purchase.

This copy should include endorsements and declarations that specifically outline your coverage and its limitations. If you don't receive it, question your insurer, agent, or broker.

If there's no satisfactory explanation for the delay, you can contact the Department of Financial Services at (800) 342-3736.

If you're involved in an automobile accident, report the incident to the police and obtain a copy of the Police Accident Report.

Be suspicious if the other driver insists it's not necessary to contact the police. This could be a sign that their car is uninsured or their insurance identification card is fraudulent.

Make sure to note the other vehicle's license plate number and obtain important insurance information. This will help you in case of any future disputes.

Take a photo of the damages if possible, as this can serve as evidence in case of a dispute over who was at fault.

New York state has issued a warning about health insurance scams that threaten to steal money or personal information.

Health insurance scams often spike during open enrollment periods, which can be a stressful time for those trying to obtain or keep health insurance.

Enrollment for insurance plans through New York's Affordable Care Act marketplace is open through Dec. 15 for coverage taking effect Jan. 1, 2025.

Scammers may use fear to target New Yorkers, threatening to cancel their Medicaid or other health coverage unless they provide hundreds of dollars to reinstate or continue benefits.

Scammers will also use false offers of generosity to lure people into providing personal information, often through phishing scams offering gift cards or money to "update" their health accounts.

Government agencies will never threaten, demand payment, or ask for credit information in a text message, email, or phone call.

You can never be charged a fee to renew health insurance in Medicaid, Child Health Plus, or the Essential Plan.

Here are some tactics scammers use to target New Yorkers:

To protect yourself, be cautious and contact the Office of the Attorney General if you think you're the target of a scam or fraud.