The legislation, known as the Stop Auto Fraud Act of 2026, was introduced earlier this month by Congresswoman Laura Gillen (D-NY-04), together with Representatives Troy Nehls (R-TX-22), Josh Gottheimer (D-NJ-05), and Vince Fong (R-CA-20).
The bipartisan bill targets intentionally staged vehicle collisions designed to defraud insurance companies and proposes severe penalties for those involved, including significant prison sentences.
“Long Islanders pay some of the highest car insurance rates in the country, and ‘crash for cash’ schemes on our roads are driving those costs even higher,” Rep. Gillen said. “When fraudsters deliberately stage car crashes to secure substantial insurance payouts, they put lives at risk and force responsible drivers to bear the financial burden. I am proud to lead this bipartisan effort to hold these criminals accountable, improve road safety, and help reduce excessively high auto insurance costs.”
Under the proposed legislation, if a staged accident results in bodily injury or the death of an innocent person, offenders could face prison sentences ranging from up to 10 years to life imprisonment.
The fines collected under the legislation would be directed to the Highway Trust Fund, which supports investment in road infrastructure and safety improvements.
According to data cited in support of the legislation, insurance companies reported 38,270 suspected motor vehicle insurance fraud incidents to the New York State Department of Financial Services in 2023 alone—an increase of 58% compared with 2020.
The National Insurance Crime Bureau (NICB) has also welcomed the proposed legislation.
“Staged vehicle accidents are not harmless property crimes. They are violent offenses that put innocent drivers and pedestrians at risk of injury or worse—all so fraudsters and their facilitators can profit,” said Kyle McCollum, Vice President of the National Insurance Crime Bureau. “NICB data and frontline investigations demonstrate that staged-accident fraud is increasing, is costly adding as much as $300 a year to insurance premiums—and is becoming increasingly organized. It therefore requires an organized and effective response,” he added. The commercial trucking industry, which has long been a target of fraudulent auto insurance schemes, has also expressed support for the legislation.
“On highways across the country, criminals are deliberately colliding with other motorists in an attempt to secure a large financial payout, and commercial trucks are a major target,” said Alex Rosen, Senior Vice President of Legislative Affairs at the American Trucking Associations.
“These reckless acts put the lives of innocent Americans at risk and contribute to rising insurance premiums, ultimately increasing costs for consumers. Stronger penalties are needed to deter those who engage in these schemes, which is why the American Trucking Associations strongly supports the Stop Auto Fraud Act,” Rosen said.
The proposed legislation has received support from a broad range of industry organizations, including the National Insurance Crime Bureau (NICB), American Trucking Associations (ATA), American Bus Association, Truck Renting and Leasing Association, American Property Casualty Insurance Association (APCIA), National Association of Mutual Insurance Companies (NAMIC), National Tank Truck Carriers Association, Truckload Carriers Association, Trucking Association of New York, Texas Trucking Association, Southwest Movers Association, United Motorcoach Association, and Coalition Against Insurance Fraud. The proposed legislation reflects growing concern in the U.S. insurance and transportation sectors over staged vehicle collisions, which can endanger road users while contributing to higher insurance costs.
https://www.insurancejournal.com/news/national/2026/09/18/885459.htm