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Arrests Are Up for Auto Insurance Fraud

By Associated Press

Albany, NY – The number of arrests for auto insurance fraud has risen in New York State, and officials hope the efforts will lead to lower car insurance premiums for consumers.

Crain's New York Business reports Mondayday that the average injury claim payout in the state has dropped 13 percent. The decline reverses a ten year trend of widening losses for the state's auto insurance industry.

Arrests for fraud during the first three quarters of 2003 rose almost 20 percent to 684 because of efforts by law enforcement agencies, the state Insurance Department and insurance companies.

Still, experts contend New York will continue to see higher insurance premiums for the next few years, primarily because of fraud.

Auto insurers lose more than $1 billion a year because of fraudulent claims in New York state. Only five states are less profitable for auto insurers. New York residents pay the second highest auto insurance premiums in the country, after New Jersey.