New York Motor Insurance posted a report this week detailing how insurance fraud is rising in New York City, leading to expensive auto insurance rates for those customers according to a press release about the findings.

Click here to read the full report.

The research indicates that 36 percent of insurance claims filed in the state of New York are fraudulent, which is currently costing tax payers over $1 billion per year.

"Because of insurance fraud, New York City drivers are faced with some of the highest insurance rates in the nation," said New York Motor Insurance in their article.

Jeff Ferguson, an assistant district attorney from Brooklyn, said that something need to be done to stop this issue, as car insurance could become too expensive for most New Yorkers to handle.

The reason this issue hurts the wallets of drivers who haven't committed a crime is because in order to make up for the losses occurred in fraudulent cases, auto insurance companies usually will raise their rates. Providers take where a customer lives into consideration when deciding how much they'll have to pay, and those who live in New York will wind up paying for the crimes others commit according the New York Motor Insurance.

Customers and officials agree that laws need to be put into place to prevent fraudulent cases, but this will also mean rates going up most likely. A $279 million fraud scheme, which was discovered last year by New York police, served as the inspiration for New York senate to pass new insurance fraud measures to impose stricter penalties. The legislation has been ineffective so far however.  

The article also stated that in 2009, drivers in Brooklyn paid an average of $2,143 for their annual insurance premium.

"This is nearly three times higher than the national average of $785 as reported by the National Association of Insurance Commissions (NAIC) for 2009."

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