Earlier this month, federal legislation was introduced to make motor vehicle collision fraud a federal crime, according to a joint press release by Congresswoman Laura Gillen (D-NY-04) alongside U.S Representatives Troy Nehls (R-TX-22), Josh Gottheimer (D-NJ-05) and Vince Fong (R-CA-20).

The bipartisan bill, Stop Auto Fraud Act of 2026, targets deliberately staged accidents intended to defraud insurance companies, imposing stiff penalties, including possible jail time, for violations.

“Long Islanders pay some of the highest car insurance rates in the country and ‘crash for cash’ schemes on our roads are driving rates even higher,” said Rep. Gillen. “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. I’m proud to lead this bipartisan bill to hold these criminals accountable, make our roads safer and lower sky-high car insurance costs.”

Penalties range from up to ten years to life in prison if the staged accident results in bodily injury or death to an innocent party.

Fines collected would be placed into the Highway Trust Fund, which provides resources to improve roads and make them safer.

Insurance carriers reported 38,270 incidents of suspected motor vehicle insurance fraud to the New York State Department of Financial Services in 2023 alone, a 58% increase from 2020.

The National Insurance Crime Bureau applauded the measure.

“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. 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,” said Kyle McCollum, vice president, National Insurance Crime Bureau.

Long a target of fraudulent auto insurance claims, the commercial trucking industry also welcomed the legislation.

“On highways across the country, brazen criminals are intentionally colliding with other motorists in an attempt to score a big payday, and commercial trucks are a top target. Their selfish actions put the lives of innocent Americans at risk and contribute to soaring insurance premiums that raise costs for all consumers,” said Alex Rosen, SVP of Legislative Affairs, American Trucking Associations. “We need stronger penalties to deter those who perpetrate these schemes, which is why ATA strongly supports the Stop Auto Fraud Act.

The legislation is endorsed by the National Insurance Crime Bureau, American Trucking Associations, 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.