New York city’s biggest insurer of taxis, black cars, Uber and other for-hire vehicles is on the brink of a collapse, Bloomberg reports: American Transit Insurance Co. recently posted over $700 million in net losses.
And if it goes under, about 60% of the city’s more than 117,000 taxis, etc., lose their coverage — and can’t legally take fares unless and until they get new insurance.
Getting around the city, especially areas without decent public transit, will be a lot tougher.
A major issue, the analysis flags , is “larger claim sizes driven by bigger settlements as well as jury and arbitration awards.”
Many of them are fraudulent.
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Insurers in recent years have seen a jump in bogus claims involving commercial fleets, from ride-share cars to Amazon delivery trucks.
One big reason: The city requires the highest commercial-vehicle coverage in the country, making those policies a potential gold mine for enterprising trial lawyers and fraudsters.
It’s another way scam rings (involving unethical lawyers and doctors, as well as scuzzy “litigation lenders”) enrich themselves at the expense of small businesses and their insurers.
Gangs (including MS-13 and Russian mobsters) are all over this fraud, recruiting the vulnerable to intentionally get hit in staged accidents, and even undergo unneeded surgery to inflate the payout.
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Notably, accused Gilgo Beach killer Rex Heuermann seems to have tried to ride this gravy train.
The Post reported last month that in 2014 Heuermann claimed he was seriously injured when a cabbie drove over his left foot in Midtown; he filed a $5 million lawsuit against the hack, the city and the Taxi & Limousine Commission.
That case got settled on still-undisclosed terms.
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But Heuermann later went on to file multimillion-dollar accident claims against motorists in Maryland, Long Island and Brooklyn.
New York badly needs tort reform to bring down all insurance costs, but a crackdown on these fraud rings is even more urgent.
Attorney General Letitia James needs to go after them, along with county district attorneys and federal prosecutors.
The Legislature should pass new laws targeting the “runners” who recruit “victims” or coach people into staging slip-and-falls and construction accidents.
Even if insurers don’t go out of business, or exit the New York market, consumers wind up paying a lot more as companies must pass along the price of soaring premiums (or themselves flee the state).
Some claim ATIC caused its own mess by capturing business with premiums too low to cover the risk; we’re certainly not calling for a bailout, but for facing the root causes of those risks.
Otherwise, you’ll be paying a lot more for a cab — if you can find one.
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