Allegations of rampant insurance fraud in New York’s no-fault auto insurance system have led to a $450 million lawsuit filed by American Transit Insurance Company (ATIC). The case accuses more than 180 defendants—ranging from ambulatory surgery centers to healthcare entities—of submitting thousands of fraudulent claims for reimbursement.
ATIC is seeking over $450 million in damages, including $150 million in compensatory damages that may be tripled under the federal Racketeer Influenced and Corrupt Organizations Act (RICO). The company’s lawsuit also calls for punitive damages, making it one of the largest RICO cases ever filed in New York State.
The alleged scheme targeted New York’s no-fault insurance laws, which require insurers to reimburse medical costs up to $200,000 for taxi and for-hire vehicles, regardless of fault. According to the lawsuit, some defendants, including All City Family Healthcare Center and other named entities, overbilled for treatments, performed unnecessary procedures, and engaged in kickbacks or improper referrals to inflate claims.
Fraudulent no-fault claims are a growing problem in New York. In 2023, the state’s Department of Financial Services reported that 94% of all healthcare fraud complaints involved no-fault claims.
ATIC also estimates that 60% to 70% of the 250,000 claims it processes annually are fraudulent, impacting not only insurers but also policyholders and the public.
Ultimately, ATIC views the lawsuit as part of its responsibility under New York Insurance Law § 409 to address fraud and hopes it will serve as a deterrent. The company is also urging lawmakers to implement stronger measures to curb no-fault insurance fraud, which continues to burden insurers and policyholders alike.
