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NEW YORK, Dec.7 - No-fault fraud is costing New York drivers nearly $2 million every day, according to the ºÚÁϲ»´òìÈ Information Institute (I.I.I.).

Criminals along with dishonest medical providers and attorneys are taking advantage of loopholes in state law to steal insurance money. This adds an average of $81 to the cost of insuring an automobile in New York. Without serious reform, no-fault fraud could add more than $300 to the cost of insuring a vehicle by 2005, says Dr. Robert Hartwig, Chief Economist of the I.I.I.

Examples of common crimes associated with no-fault fraud are staged accidents, billings for unnecessary or non-existent medical treatments and supplies, falsified police reports and identity theft.

Law enforcement working cooperatively with the National ºÚÁϲ»´òìÈ Crime Bureau and insurance company special investigative units spend millions of dollars investigating and prosecuting no-fault fraud, but this crime persists and is growing. Sadly, New York's no-fault system is itself part of the problem.

Under current no-fault medical (sometimes called personal injury protection or PIP coverage), fraud criminals have 180 days to submit medical bills after an accident, while insurers only have 30 days to pay or deny a claim, even if there is a strong suspicion of fraud. Otherwise, insurers may face legal action. This allows criminals to conceal fraud and abuse in mountains of misleading and bogus bills. Murky billing guidelines under no-fault also make it easier for corrupt medical professionals to abuse the system.

Reforms are pending before the New York state government which would stiffen penalties for fraud; shorten deadlines for submitting bills; establish needed guidelines for treatment, and decertify medical professionals convicted of insurance fraud. The I.I.I. points out that none of the suggested reforms would in any way reduce the benefits to injured people or slow down payments to honest policyholders, medical providers or attorneys.

Without legislative reform, the I.I.I. estimates that the average auto insurance expenditure could increase an estimated 65% from $957 in 2000 to $1,578 in 2005. New York could account for as much as 10% of all auto fraud in the United States - making it the fraud capital of the country.

More information is contained in the I.I.I.'s report, No-Fault Medical Fraud in New York State: Problems and Solutions at the Institute's website .

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The I.I.I. is a non-profit communications organization supported by the property/casualty insurance business.