BROOKLYN, N.Y. – Uber has gone to federal court to sue a group of people it claims are staging accidents in New York, citing Gov. Kathy Hochul’s declaration that these schemes lead to “jackpot” payouts.
Uber’s April 14 lawsuit is another development as Hochul pushes reforms. It had already filed a racketeering lawsuit, and FedEx earlier this month filed a case of its own against Ikhilov Law Group and several medical care providers.
Hochul has blamed staged accidents for driving up auto-insurance costs for everyone, and federal prosecutors recently charged a man with scamming insurers out of tens of millions of dollars.
Uber calls the 14 defendants in its latest lawsuit a “fraud ring” and says they used a common bank account, phone and address.
“The pick-up locations are residential side streets (usually one-way roads) in Nassau County, which allow the Fraud Ring to lure the unsuspecting… drivers using the Uber app toward a location where a hit-and-run collision will occur,” the suit says.
“The pre-determined locations for the staged collisions are often intersections with stop signs… (T)he Fraud Ring chooses these locations due to the low probability that they are monitored by video cameras.”
The wrecks are usually side-swipes, Uber says, and the defendants then submit fraudulent claims of injury to Uber. Several health care companies are also named as defendants for allegedly verifying these fake injuries and submitting claims to insurance companies like Liberty Mutual, which is co-plaintiff in the suit.
Like FedEx, Uber says its fleet of vehicles has become a target. New York drivers are required to carry no-fault insurance, which lets them and others obtain benefits of up to $50,000 for injuries in accidents.
Hochul said insurers reported more than 38,000 incidents of suspected auto-insurance fraud in 2023, which helped tack an extra $300 onto everyone’s yearly premium. The no-fault law also limits lawsuits to only those alleging a “serious injury” – something doctors are allegedly happy to diagnose.
Gov. Hochul is trying to get support from lawmakers for her plan, which would give insurers more than just the current 30 days to investigate and will change a law that allows individuals committing crimes like impaired driving to receive big payouts. To do so, she plans a cap on non-economic damages in those instances.
She’d also follow the lead of other states like Connecticut and New Jersey that permit recovery of damages only if the plaintiff is not primarily at fault. The term “serious injury” also needs to be more clearly defined, as its application is currently inconsistent in courts, she says.
“Car insurance rates are just too damn high, especially at a time when families are feeling squeezed by the cost of living,” Hochul said.
Polling shows voters support lawsuit reform that would lower their auto-insurance premiums, and the group Protecting American Consumers Together pushed a television ad campaign aimed at “billboard lawyers” who corrupt the legal system at the expense of all New Yorkers.
