Fraud wrecks auto insurance for everyone
Big Florida cities hot spots for staged accidents and bogus claims
Automobile insurance fraud cost $14 billion in 2004, according to the Coalition Against Insurance Fraud.
Staged accidents and fake injuries claimed under Personal Injury Protection (or PIP) coverage account for the majority of auto insurance fraud, and recently the National Insurance Crime Bureau (NICB) identified the cities with the highest number of staged auto accidents. Florida has three cities in the top 10: Miami at No. 1, Tampa at No. 6, and Orlando at No. 8.
Why should you care? With what this fraud costs the typical Florida family each year, you could make a car payment, or buy a couple of bottles of Dom Perignon champagne.
Tom Gallagher, Florida's chief financial officer, announced in February the arrests of 21 people for allegedly staging 10 auto crashes. The investigation leading to the arrests uncovered more than 60 staged crashes throughout the Tampa Bay area. The staged crashes resulted in nearly $1 million in fake claims.
Insurance fraud affects you, even if you are not involved in a fraudulent accident or claim.
• The costs are passed on through your auto insurance premiums.
• Cost of goods and services go up because businesses also pay higher premiums.
• Increased costs for law enforcement and prosecution.
Just three months earlier, in Miami, a similar investigation uncovered an alleged staged crash ring accused of filing more than $100, 000 in fraudulent insurance claims for a single staged accident. Three medical clinics were also involved — including a chiropractor who was previously arrested for insurance fraud and grand theft.
Gallagher continues to work with the Florida legislature to strengthen laws to put more of these types of con artists behind bars. The Department of Financial Services, which Gallagher oversees, also offers a reward of up to $25,000 for information leading to an insurance fraud arrest and conviction.
If you suspect fraud, call the department's Fraud Fighters hotline at 1-800-378-0445. You may be the target of a scam if:
• Someone asks you to participate in a staged accident or let them claim that you were in a vehicle during an accident you were not involved in.
• At or following an auto accident, you get unsolicited calls urging you to visit a medical clinic or lawyer's office.
• You are offered a payment to go to a medical clinic, diagnostic center or lawyer's office.
• You are asked to sign blank treatment forms at a medical clinic.
• Following emergency room treatment after an auto accident, you get a call that the hospital has referred you to a clinic or diagnostic center for further treatment.
• Your physician waives the insurance deductible.
• You receive benefits statements from your insurance company that include treatments you don't remember receiving.
In the past five years the department's Division of Insurance Fraud has arrested more than 1,000 individuals for PIP fraud-related crimes. Several dozen are serving or facing a minimum mandatory prison sentence of two years for organizing or participating in a staged crash, to be followed by a year's suspension of their driver's license.
These aggressive measures have led to a decrease in auto insurance premiums in Florida, and the legislature continues to add tougher penalties and more law enforcement resources. Do your part by reporting if you have been solicited to participate in a scheme, or suspect someone else is involved in one.
Together we can put the brakes on this costly crime.