PIANY’s fight against insurance fraud: lowering premiums for consumers

High insurance premiums are a growing concern for both policyholders and insurance professionals. While many factors contribute to rising costs, fraud and legal loopholes often play a significant role. That’s why PIANY is advocating for legislative reforms that target fraud and unfair legal practices—efforts that could lead to more affordable premiums for New York state residents.

Two of PIANY’s key legislative priorities focus on:

• Regulating lawsuit lending
• Addressing no-fault and construction accident fraud through tort reform

Here’s how these initiatives could make a difference for policyholders, and why PIANY is leading the charge.

Regulating lawsuit lending: protecting consumers from predatory practices

Lawsuit lending—also known as third-party litigation funding—has become a booming industry, but its lack of regulation raises serious concerns. These lenders provide cash advances to plaintiffs awaiting legal settlements, but the terms often are predatory, with sky-high interest rates that can leave consumers worse off than before.

Without oversight, some lawsuit lenders exploit vulnerable plaintiffs by charging excessive fees that eat away at their settlements. This not only hurts individuals, but it also inflates legal costs, ultimately impacting insurance premiums.

What PIANY is doing

PIANY supports legislative efforts to bring transparency and fairness to lawsuit lending. By pushing for regulations that cap interest rates and require clear disclosures, PIANY is working to protect plaintiffs from unfair lending practices, to ensure transparency in loan agreements and to help prevent rising insurance costs caused by excessive legal expenses.

Regulating this industry is a crucial step toward a more balanced legal system—one that supports legitimate claims without driving up premiums for everyone.

Tort reform: cracking down on no-fault and construction accident fraud

New York state’s no-fault insurance system was designed to make accident claims more efficient and reduce lawsuits. However, it has become a target for fraud and abuse—leading to higher premiums for honest drivers.

Fraud rings stage accidents and submit inflated medical claims, driving up costs for insurers. Then, these increased costs are passed down to consumers in the form of higher auto insurance rates.

However, auto insurance fraud isn’t the only issue. Staged construction site accidents also have become a growing problem, leading to fraudulent workers’ compensation claims and inflated liability costs for businesses and insurers. These false claims burden the system, drive up costs—which, ultimately, impacts policyholders.

What PIANY is doing

PIANY is advocating for legislation that would expand criminal penalties for individuals who organize staged motor vehicle and construction accidents. By increasing enforcement and making it riskier to commit fraud, these reforms can reduce fraudulent claims that inflate insurance costs, hold fraudsters accountable for exploiting the system, stabilize auto and business insurance premiums for honest policyholders.

Strengthening fraud laws will restore integrity to the system and ensure that insurance remains affordable and accessible for all New Yorkers.

PIANY’s broader advocacy efforts

PIANY has a strong track record of advocating for consumer-friendly insurance reforms. In recent years, the association has successfully pushed for:

• Reforming supplemental spousal liability laws, ensuring fair coverage for spouses injured in accidents
• Permitting the sale of parametric insurance, giving consumers more options for coverage tailored to their needs
• Prohibiting “bait-and-switch tactics” that increase premiums after a policy effective date
• Opposing changes to New York’s wrongful death laws, which could have led to higher liability costs and increased insurance premiums

By continuing to fight for sensible reforms, PIANY remains a leading voice in the industry—working to create a fairer, more transparent insurance market that benefits both policyholders and insurance professionals.

The bottom line: fighting fraud to lower premiums

Insurance fraud and unchecked legal practices contribute significantly to rising premiums. PIANY’s efforts to regulate lawsuit lending and strengthen laws against staged auto and construction accidents are critical steps toward protecting consumers from unnecessary costs.

Through advocacy and legislative action, PIANY is committed to making insurance more affordable and ensuring a fair legal system for all New Yorkers. Policyholders and insurance agents alike should support these reforms—because when fraud is reduced, everyone benefits.