Auto insurance premiums driven down by anti-fraud law?

By Amy Lambiaso/ State House News Service

Wednesday, January 5, 2005



People who help stage car accidents to collect insurance money and the doctors and lawyers who help them now face jail time and stiff fines under a new law that could drop auto insurance



costs by up to $200 a year.



The law signed by Gov. Mitt Romney at a Corner Office ceremony on Monday targets the so-called "runners" who collaborate with personal injury lawyers and chiropractors to hire drivers and stage accidents. The accident victims in turn run up high medical bills and sue insurance companies for "pain and suffering" under personal injury laws, with the "runners" and other involved parties collecting a share of the claim.



The new law was launched by lawmakers in Lawrence, the city known to be the state's capital of auto insurance fraud and cases of "running," said Sen. Susan Tucker (D-Andover). There are an average of 43 injury claims per 100 accidents statewide, according to the Division of Insurance. In Lawrence, there are an average of 141 injury claims per 100 accidents.



"When people are staging fraudulent accidents, we all get stuck with the



bill," Romney said.



Insurance Commissioner Julianne Bowler estimated that the average cost of auto insurance will likely drop by $100 to $200 a year, should the number of fraudulent auto insurance claims decrease. In areas where auto insurance fraud is more prevalent, such as Lawrence, Boston, Brockton, Holyoke, and Springfield, costs may go down even more, Bowler said.



"This is part of each and every one of our insurance bills every year," said Rep. Ronald Mariano (D-Quincy), co-chairman of the Insurance Committee.



The new law makes it a felony to act as or hire a "runner," punishable by five years in prison and up to a $4,000 fine. In addition, the law allows the state's Division of Professional Licensure and Board of Allied Health



Professionals to review billing practices and insurance data of chiropractors and other physicians to uncover fraud. Physicians found to be involved with fraudulent cases will automatically be stripped of their license to practice in Massachusetts, under the law.



Senate President Robert Travaglini (D-East Boston) said strengthening Massachusetts insurance laws was a priority during the last several months of the 2003-2004 session, which ends Tuesday at midnight.



"This sends out a very clear message throughout the industry and throughout the Commonwealth of Massachusetts that we're not going to tolerate this practice any longer, and you're going to pay the price," Travaglini said.