IF YOU THINK HAVING AN ACCIDENT IS BAD, TRY HAVING AN ACCIDENT AFTER YOUR INSURANCE IS CANCELLED.

From: New York attorney Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx; Bronx Injury Lawyer)

I've previously blawged: "If You Live in New York, Register and Insure Your Car in New York- Duuuhhhhh." Car owners trying to save money by registering and insuring their cars in states where they do not actually reside run a terrible risk. In the event of an accident, the owner's insurance company may refuse to pay for damages or injury from the accident because it considers the insurance as obtained through fraud. The car owner may face complete denial of insurance coverage, even in the face of claims from people seriously hurt.

If you want to register and insure your car outside of New York, please really live at the address you use. And vote there. And pay taxes and utility bills and rent or a mortgage there. We turn now to a case I want to bring to your attention, which deals with the nuances of New York State's No-Fault insurance law.

Decided on July 22, 2009 by New York State's Supreme Court, Appellate Term, New York (First Department) is: AA Acupuncture Service, P.C. v. Safeco Insurance Company of America.

The plaintiff, AA Acupuncture Service, and several other health care providers treated a patient for injuries suffered in a car accident. The injured person gave her medical caretakers "assignments" which allowed them to directly bill the No-Fault automobile insurance carrier, Safeco Insurance, for the patient's care. Also, by taking the assignment(s) the health care provider(s) "stand in the shoes" of the patient, so that in addition to billing for their services, they can sue a non-paying insurance company on behalf of the patient. Which is what happened in this case.

The facts are straightforward, and the majority opinion simple, short and sweet. The accident victim gave a phony Connecticut address - a commercial store in a strip mall - as the place where she lived and where her car would be kept. She actually lived in Brooklyn, in beyootiful New York City. She paid an annual car insurance premium of $1,236 based on the Connecticut address. Had she used her (correct) Brooklyn, New York address, her premium would have been $4,807.

The Court considered this as fraud, and permitted the insurance company to not pay the doctors' bills, even though they did not participate in the fraud because "they stood in their patient's shoes," and her fraud relieves Safeco Insurance of its obligation to pay any benefits under the policy of insurance that it sold.

I really want to bring to your attention the concurring (agreeing) opinion of one of the judges in the case, who had a lot to say against this kind of fraud.

'For sure, there are those, in these dire economic times, who might ask, "What's the big deal?" In the minds of many, insurance companies charge too much for too little. Perhaps there are those who simply cannot afford to insure a vehicle in New York, yet need a car for work or personal necessity. True, theirs is a choice not motivated by ill gain, but by economic considerations. Whatever the reason, the reality remains that the spiraling cost of automobile insurance premiums in New York is directly linked to ever increasing instances of insurance fraud.

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Thus, the New Yorker deceitfully claiming to be a Pennsylvanian for purposes of registering a car might pay less, but the rest of us pay more. Soon, New Yorkers will pay higher fees to register their vehicles. Those of our neighbors who do so elsewhere will escape that cost and our State will be shortchanged much-needed revenue.

However, the sad truth is that this insidious brand of fraud produces consequences beyond higher fees and insurance premiums. What about the innocent family involved in an accident with one of these out-of-state registrants? Are they assured of a financially responsible source of compensation for physical injury or the death of a loved one, or must they deal with a "fly by night" local insurer, little regulated and beyond the jurisdictional reach of New York courts? What about the disclaimer jurisprudence in these foreign states? Will the innocent victim of the tortious wrong of a fraudulent out-of-state registrant still have the benefit of insurance once the fraud is discovered? The questions are myriad and the potential for harm to New Yorkers is real and significant.'