FPCA Auto: Florida Leads Nation in Staged Accident Complaints
May 11, 2010
A National Insurance Crime Bureau report released on May 10, 2010 shows Florida leading the nation in staged automobile accident complaints. From 2007 to 2009, suspicious claims reported by Florida auto insurers more than doubled.
A May 11, 2010 Sun Sentinel article published on the report is reprinted below.
Florida is No. 1 for fraudulent insurance complaints tied to staged accidents
Insurance companies reported they suspected fraud in 3,006 automobile insurance claims in Florida from 2007 to 2009
By Julie Patel
Florida led the nation in the number of complaints about insurance fraud related to staged accidents over the past three years, according to a report released Monday by the National Insurance Crime Bureau.
Insurance companies reported 3,006 suspicious automobile insurance claims in Florida from 2007 to 2009. The suspicious claims, where insurers suspect fraud, more than doubled from 710 in 2007 to 1,446 in 2009.
Florida far outpaced the larger states that came in second and third: New York and California had 1,680, and 1,619 suspicious claims, respectively.
Among metropolitan areas, South Florida ranked second in the nation – behind the New York and New Jersey area – with 1,298 suspicious claims filed during the past three years.
Florida and New York may have the most questionable claims because they’re among the five largest states and both require a driver’s own insurance to cover some of their medical payments regardless of who is at fault, experts say.
“Staged accidents are dangerous criminal events that target innocent drivers with increasingly bold schemes aimed at defrauding insurance companies out of millions of dollars. Unless someone becomes suspicious, many of these staged accidents go undetected,” wrote the NICB.
The nonprofit group, which fights insurance fraud by tracking, researching and investigating claims, is supported by more than 1,000 insurers and self-insured groups.
Frank Scafidi, public affairs director for the NICB, said the group does not know how many of the questionable claims led to convictions. He said such claims make up a fraction of all claims policyholders submit. About 85,000 claims – less than 1 percent of the 48 million insurance claims processed annually – are flagged as being possibly fraudulent.
The recession appears to have fueled some of the increase in suspicious activity, he added. “That winds up costing us all more in the end,” Scafidi said. Insurers pass their expenses, including claims costs, to policyholders through rates.
Florida Chief Financial Officer Alex Sink announced last month that the state’s Division of Insurance Fraud worked with the NICB and local police to arrest eight people – including two in Miami – for alleged involvement in staged accidents, bringing the total number of arrests over the issue to 27 this year.
The insurance fraud division made more than 830 insurance fraud-related arrests in the past year. The state’s Department of Financial Services will pay up to $25,000 for information directly leading to a conviction. Anyone with information can call the state’s Fraud Fighters Hotline at 800-378-0445 or visit http://www.MyFloridaCFO.com/fraud.
The NICB also accepts tips on its hotline, 800-835-6422, or at http://www.nicb.org/speak_up/speak_up. Tips with the keyword “FRAUD” can also be texted to 847411.
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