Fraud Is Driving Up Insurance Costs
Fraudulent Slip and Fall cases are estimated to pull about $4 billion out of affordable housing investment in New York.
That is the estimate by the Milford Street Association, an insurance captive that has been praised by mayor-elect Zohran Mamdani for reducing the costs of insurance for a handful of non-profit housing providers.
They report that roughly 75,000 slip and fall cases have been filed, in total. They estimate that the majority of them are fraudulent claims that are driving up rents.
Litigation costs in New York are 67% higher than the national average, driven by excessive lawsuits, inflated awards and settlements, and rampant fraudulent activity.
– Carlina Rivera, President & CEO of New York State Association of Affordable Housing Providers
“According to the National Insurance Crime Bureau, New York City ranks #1 in the U.S. for questionable slip-and-fall claims. Fraudulent claims have become routine, often involving staged accidents or exaggerated injuries. Beyond fake incidents, fraud also includes those claims in which a person did fall, but the accusation of improper maintenance or negligence is unfounded.”
– Kathleen Irwin, NYAA Policy Director
“Rising litigation costs—driven by third-party lawsuit financing and social inflation—are escalating premiums and prompting some insurers to withdraw from the market. Slip-and-fall claims and prelitigation settlements are especially problematic, leading to stricter underwriting standards and nonrenewals. We recommend that the Legislature pursue targeted tort reforms to reduce legal abuse and provide greater predictability in liability exposure, ultimately benefiting policyholders across the state.”
– Professional Insurance Agents of New York
“...the hostile legal climate has created a chilling effect on development. Builders and developers are increasingly hesitant to take on new projects due to the cost of liability insurance. The risk of litigation is too high, and the cost of coverage is inflated by abuse.”
– Tom Stebbins, Lawsuit Reform Alliance of New York
