Auto Insurance Fraud Equals High Costs for Everyone

Florida is getting a lot of attention due to high levels of auto insurance fraud. Florida’s auto claims total 30 percent of all questionable national claims, giving it the distinction of being No. 1. Personal injury protection fraud is such a big problem that’s it is driving up all drivers’ Florida auto insurance premiums.

“Floridians need to know that our state, unfortunately, continues to have the highest number of questionable, or ‘staged’ accidents of any other state in the country,” said PCI assistant vice president and Florida regional manager William Stander. Four of the top 10 cities with the most fraudulent claims include Tampa, Orlando, Miami, and Hialeah.

PIP fraud squads are attempting to uncover staged accidents and bogus auto insurance claims. With triple-digit increases in questionable claims, the state’s Department of Financial Services and Division of Insurance Fraud want to introduce laws that will assess civil penalties for fraud, tighten medical clinic regulations and ensure their healthcare services are appropriate for the accident.
Florida car insurance companies are on the lookout for fraudulent claims and assess the following red flags:
• Increasing or adding coverage in the weeks before an accident or theft happens
• History of losses and claims
• Individual who is overly calm after a big accident
• High debt loads that would cause an individual to want to make a claim
• Medical records appear altered or only list highest-cost procedures
• Unusual delay in reporting the accident
• Taking off more days than is typical due to the accident

As insurance adjustors and regulators attempt to decrease fraud, they are turning to forensic accounting and other investigation tactics to determine the validity of a claim. “Policyholders shouldn’t be afraid to submit a legitimate claim,” said Tom Welsh, vice president of training for the National Insurance Crime Bureau. “Insurance companies don’t want to pay anything they don’t legitimately owe because that hurts their customers and their business. Fraud hurts everybody because everyone’s premiums go up when fraud happens.”

Attorney fees and auto accident-focused healthcare centers are under heightened scrutiny. Increased claim severity and costs are being viewed as a way for these two industries to profit off of low-grade injuries such as fender benders. But in the long run it just really hurts monthly auto insurance premiums, said the Property Casualty Insurers Association of American.

Melissa DeAngelo is with Florida auto insurance company and Florida car insurance company, AGIC. To get a quote or learn more visit www.agicinsurance.com.