NU Online News Service, June 24, 11:09 a.m. EST
Allstate Insurance has filed another lawsuit in New York—this time in an attempt to get back $1 million from 10 psychological services facilities that alleged were never eligible to get insurance payments.
Since 2003, Allstate has filed 30 fraud lawsuits in New York, seeking close to $170 million in damages. The lawsuit, filed after an investigation by the insurer’s Special Investigations Unit, is the third fraud-related lawsuit to be filed by Allstate in New York this year.
This most recent suit, filed under the Racketeer Influenced and Corrupt Organizations Act and state law, claims four psychological services corporations were fraudulently licensed by using the name of licensed psychologists, but the facilities were owned and controlled by five laypersons. The facilities were not eligible to receive personal injury protection payments under the state no-fault insurance law, Allstate says.
Insurers have been pushing for reform to the state’s no-fault system. In a statement announcing the lawsuit, Allstate refers to Fraud Costs NY, a group of insurance trade associations, consumers, small business, and legislators looking to get laws changed.
“The no-fault system is being exploited and responsible citizens are the victims,” says Krista Conte, Allstate spokeswoman. “Without the support of lawmakers, incidents of fraud will continue to increase.”
According to the lobbying website, New York’s average no-fault claim cost is 64 percent higher than the national median of $5,289 and has increased 55 percent since 2004.
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