The American Property Casualty Insurance Association (APCIA) has issued a statement commending Reps. Laura Gillen, D-NY., Troy Nehls, R-TX., Josh Gottheimer, D-NJ, and Vince Fong, R-CA, for introducing the bipartisan Stop Auto Fraud Act of 2026, which would make staging or fabricating a motor vehicle crash to file a fraudulent insurance claim a federal crime for the first time.
Sam Whitfield, APCIA's senior vice president of federal government relations, tied the bill directly to rising premiums.
"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. States that have enacted targeted anti-fraud and staged accident reforms have strengthened enforcement, disrupted organized fraud rings, and helped stabilize auto insurance markets, with some states even experiencing premium reductions," Whitfield said.
The legislation, introduced September 3, would establish federal criminal penalties for anyone who knowingly stages or fabricates a motor vehicle crash to submit a fraudulent insurance claim.
Penalties scale with harm - up to 10 years in prison for a staged crash causing no injury, up to 20 years if the crash causes serious bodily injury, and up to life in prison if it results in death. Any fines collected would flow into the Highway Trust Fund, the federal account that finances road, bridge and public transit projects, a structural choice lawmakers have framed as tying enforcement directly to infrastructure funding rather than general revenue.
Rep. Nehls framed the bill around who ultimately bears the cost of this kind of fraud.
"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. It's time we put an end to this, make it a federal crime, and hold these fraudsters accountable," Nehls said.
Meanwhile, Rep. Gottheimer noted the interstate nature of many fraud operations specifically: "Insurance fraudsters send premiums skyrocketing and drive up the cost of living for Jersey families. The fraud rings behind them don't stop at state lines."
The bill's core idea, criminalizing the act of staging a crash specifically rather than relying on general fraud statutes, isn't new; it's a federal extension of reforms several states enacted years earlier.
New York passed its own version in 2019, known as Alice's Law after Alice Ross, a Queens grandmother killed in 2003 when a driver intentionally crashed into her car as part of an insurance fraud scheme. That law made staging an accident a distinct felony in New York rather than leaving prosecutors to rely solely on broader fraud or reckless endangerment statutes.
The Stop Auto Fraud Act effectively nationalizes that same logic, giving federal prosecutors a dedicated tool for fraud rings that, as Gottheimer noted, frequently operate across state lines in ways state-level statutes alone can't fully reach.
The fraud categories the bill targets are a documented and costly problem industry-wide.
The Coalition Against Insurance Fraud estimates fraudulent claims cost the US approximately $308.6 billion annually, adding roughly $900 to the average policyholder's yearly insurance costs, a figure the National Insurance Crime Bureau has cited repeatedly in its own public awareness campaigns.
Staged and fabricated accidents specifically have shown up as a persistent regional problem in NICB's own analysis. The organization has identified staged vehicle accidents as the top insurance fraud issue in states like South Carolina, and federal investigators have pursued organized staged-accident rings through operations targeting commercial vehicle crashes in cities including New Orleans.
The bill's explicit reference to AI-altered photo evidence in Whitfield's statement also reflects a genuinely newer wrinkle in this fraud category, as image-generation tools make fabricating convincing damage or injury evidence easier than in years past.
For claims adjusters and special investigations units, a federal staged-crash statute would give investigators an additional prosecutorial avenue when a fraud ring's activity crosses state lines, a structural gap state-level laws like Alice's Law were never designed to close on their own.
For insurers more broadly, the bill's fate is worth tracking as a potential data point on whether Congress is willing to treat organized auto fraud as a distinct federal offense rather than leaving enforcement entirely to a patchwork of state statutes, a shift that, if it holds and the bill advances, could eventually factor into how carriers model expected fraud-related loss trends in states that currently lack their own dedicated staged-accident statute.
