Senator Charles E. Schumer (D - NY) Friday announced that he is introducing the Cheaper Car Insurance Act of 2010, legislation that would set up new federal penalties for auto insurance fraud.
This bill comes on the heels of a new report which reveals that auto insurance fraud is on the rise in New York, along with drivers’ insurance rates. Suspected fraud cases have risen by 33% since 2006 in New York alone, leading to auto insurance rate hikes averaging 6.3% in 2009. Schumer’s legislation will go after criminals who perpetrate the fraud, requiring them to foot the bill. It will also impose much stiffer penalties on criminals involved with auto insurance fraud.
“This Cheaper Car Insurance Act of 2010 sends a very simple, very strong and very clear message to anyone even thinking of committing auto insurance fraud: expect to be arrested, expected to be tried in federal court by federal prosecutors, and don’t make any plans for the next five to fifteen years,” said Schumer. "Auto insurance fraud is a serious business that causes substantial damage to drivers and business, and until we tackle this problem head on insurance rates will continue to rise. I will fight to see that this legislation becomes law and so that New Yorkers can see their insurance rates stop rising.”
The Cheaper Car Insurance Act of 2010 will set up new federal penalties to combat auto insurance fraud, which is currently prosecuted only at the state level where perpetrators often get off with simple restitution. Under the legislation, a judge could impose fines of up to $100,000, more if the damages were in excess of that amount and five to 15 years in federal prison, depending on the individuals role in the fraud.
"Auto fraud hurts everyone whose car insurance bill goes up even though their car goes down in value," said Schumer. "It hurts every small business that can afford to buy more delivery vans but can’t afford to insure them. Fraud hurts vacationers and business travelers to New York who don't understand why car rental insurance rates are so much higher here than in other cities and states. Fraud hurts us all, and it’s time to strike back."
Some estimate say that scams cost insurers and drivers a whopping $229 million last year alone.
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Where is the "Chuck Schumer Is a Fraud" bill?
D'Amato was right!
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