Allstate Car Insurance Takes a Stand Against Auto Insurance Fraud In NY, NJ and PA

Thursday’s Post 12.29.11 –  Allstate Budget Car Insurance Company has begun proceedings to take back over 6 million dollars from more than eighty organizations in New York, New Jersey and Pennsylvania whom were paid for allegedly fraudulent Auto Insurance claims. The action falls under the State’s RICO statutes.   Allstate Insurance Company provides both Car Insurance Quotes and Homeowners Insurance Quotes both on the interent and through independent auto insurance agents. 

The lawsuit states claims that more than a dozen defendants engaged in fraud. Over the past eight years, Allstate Car Insurance has instated proceedings in more than thirty lawsuits in NY trying to reclaim close to $200 million in fraudulent car insurance claims. In information provided by the Institute for Insurance Information, the claims that New York State finds itself in a crisis of fraudulent insurance claims practices, with so-called “no fault” fraud claims resulting in millions in escalating premium payments for state residents. The heart of the Allstate lawsuit claims that retailing operations – both through the companies’ proprietors and through collusion with wholesaling organizations and those proprietors –submitted for payment fake backup documentation to the insurer, to be paid by New York’s “no fault”  car insurance legislation. The auto insurance companies are receiving support from other insurance agencies and a host of state politicians in their push to change the current system of no fault auto insurance payments. A representative from Allstate’s main headquarters explained that the zero fault system in place is open to exploitation, and that law-abiding people were suffering for it. She went on to explain that politicians would need to support reforms, or else instances of fraudulent practices would keep up their upward trend. She cited the necessity of working in concert with pertinent parties to repair the system currently supporting these fraudulent enterprises. The law suits against the car insurance fraudsters was initiated after an internal special investigation was commenced, revealing these activities. The claim attempts to recuperate individual auto insurance claims coverage losses from funds the insurer disbursed for its clients, for the range of time indicated in the filing.


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762  ext. 602