Federal bill filed to deter ‘crash for cash schemes’
A bipartisan bill has been introduced in Congress that legislators say would make motor vehicle collision fraud a federal crime, improve safety for drivers, and lower car insurance rates nationwide, according to a press release.
Reps. Laura Gillen (D-NY-04), Troy Nehls (R-TX-22), Josh Gottheimer (D-NJ-05), and Vince Fong (R-CA-20) introduced the Stop Auto Fraud Act of 2026 in the U.S. House on Sept. 3. They say that according to Insurance Information Institute data, auto insurance fraud costs consumers an estimated $300 a year in increased premiums.
“The legislation targets insurance fraud schemes in which bad actors deliberately cause, stage, or fabricate motor vehicle accidents to file false claims and defraud insurance companies for large cash payouts,” the release states.
According to the bill text, those who file false, fictitious, or fraudulent claims for payment of a loss under an insurance policy will be fined and/or face up to 10 years in prison. That includes falsely reported losses related to medical treatment, repair costs, lost wages, or lost benefits.
If the violation results in serious bodily injury, as defined under federal law, the claimant will be fined and/or imprisoned up to 20 years. If the violation results in death, the claimant would be fined and/or imprisoned for any term up to life.
Gillen said “crash for cash schemes” are driving auto insurance rates even higher on top of her constituents’, which are already some of the highest in the country.
“When fraudsters stage car wrecks to scam their way to huge payouts, they’re putting lives at risk and forcing responsible drivers to bear the costs,” she said in the release. “I’m proud to lead this bipartisan bill to hold these criminals accountable, make our roads safer and lower sky-high car insurance costs.”
Nehls added that hardworking American famililies end up paying the “fraudsters” need to be held accountable.
“Bad actors across the country are deliberately causing, staging and fabricating car wrecks and filing phony insurance claims, and it’s the hardworking American families who end up paying the price with high insurance rates,” he said in the release.
He and Gottheimer noted that under the bill, the fines collected would be put into the Highway Trust Fund to make road and bridge improvements.
Fong echoed some of what Gillen said regarding high insurance rates for his constituents, and added that the bill would give law enforcement the tools necessary “to dismantle the criminal networks behind them.”
“Californians already pay some of the highest car insurance premiums in the nation on top of having one of the highest costs of living,” said Fong in the release. “Insurance fraud is making it worse. Staged car accidents are a deliberate, organized scam that puts innocent people at risk and drives up premiums for every driver on the road.”
The press release notes that Florida, Louisiana, and New York recently enacted laws targeting bad actors who stage elaborate accidents “to win payouts from insurance companies or jury awards.”
The bill has support from the National Insurance Crime Bureau (NICB), the American Property Casualty Insurance Association (APCIA), the National Association of Mutual Insurance Companies (NAMIC), and several trucking and bus associations.
“Staged vehicle accidents are not harmless property crimes. These are violent offenses that put innocent drivers and pedestrians at risk of injury or worse — all so that fraudsters and their facilitators can cash in,” said Kyle McCollum, NICB’s vice president, in the release. “As NICB data and frontline investigations demonstrate, staged accident fraud is on the rise, costly — up to $300 a year in increased premiums — and increasingly organized. And it demands an organized, effective response. NICB applauds Rep. Gillen’s Stop Auto Fraud Act of 2026, a bipartisan measure making clear that staged accidents are serious crimes deserving serious consequences.”
APCIA alleges that auto claims fraud, including intentional crashes, staged accidents, fabricated medical bills, and AI-altered photo evidence, “drives up costs throughout the system and ultimately raises auto insurance premiums for everyone.”
Sam Whitfield, APCIA’s federal government relations and political engagement senior vice president, said in the release that similar state-enacted anti-fraud bills have “strengthened enforcement, disrupted organized fraud rings, and helped stabilize auto insurance markets, with some states even experiencing premium reductions.”
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