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NICB Florida Car Insurance Fraud Study

An NICB Florida car insurance fraud study has revealed that the rate of suspicious car accident claims in the state of FL has risen dramatically. NICB, or the National Insurance Crime Bureau, conducted a study of questionable claims submitted by its insurance company membership and found that the numbers of those claims jumped considerably from 2008 to 2009.

According the NICB, the southern part of the state used to be the focal point of staged accident fraud activity, but criminal elements in other areas of the state have become more active, with the Tampa area at the heart of the new trend. Insurance fraud in general rose over the same time period, but the jump in staged accidents outstripped the increase in overall fraud cases by a huge margin. The dramatic increase indicates that criminals in the state intent on capitalizing on insurance fraud are taking advantage of car insurance law in the state of Florida. Florida is one of a dozen no fault states in the country.

Florida Frequent Insurance Fraud Target

Throughout the years, industry studies have repeatedly pointed to Florida as the state among no fault states with the highest rates of auto insurance fraud, in comparison to states with programs similar to Michigan's credit based car insurance. Criminals who are operating in the state and staging accidents have found that this type of activity is beneficial to them financially because they can collect large payouts on their claims with very little risk of getting caught. For this reason the latest numbers are not all that surprising to most experts in the state. But even with this being the case, the results of the NICB study definitely represent a renewed call to action in Florida. Lawmakers and law enforcement authorities as well as industry leaders have shown increased interest in formulating solutions to the long standing problem.

Bodily Injury and PIP Claims

Historically, the state of Florida has had the highest rates of fraudulent bodily injury and personal injury protection (PIP) claims. What this means for the vast majority of Florida auto insurance policy holders who abide by the law and do not abuse their coverage is that those who follow the rules end up paying for those who do not. As demonstrated in other states with auto insurance fraud troubles as well as the state of Florida, increased or persistently high rates of fraud inevitably lead to higher premiums for drivers as insurers struggle to recover their losses from higher than statistically predicted claims payouts. Insurers pay more because they are forced to charge higher rates and have a harder time retaining clients. And of course consumers pay more because in the end, they are the ones holding the increased bills in their hands.

Various agencies including the NICB are working to reverse the trend and reduce the rate of staged accident auto insurance fraud in the state of Florida. In cooperation with the state auto insurance industry as well as law enforcement authorities, they put together a task force in the early 2000s to research and focus in on this particular type of auto insurance fraud. One of the reasons the criminal element has moved northward in their efforts is that the joint efforts of these task forces has been successful in the southern part of the state where the crimes used to be more prevalent. Since more of these staged accidents are being witnessed in the Tampa and Orlando areas, more task force personnel will begin focusing their efforts there to try to continue putting pressure on those who commit these crimes.

Public Awareness of Insurance Fraud

As with any other type of crime, one of the most effective deterrents is public awareness. As more people in the state of Florida become aware that such a major problem exists, they will be more likely to be on the lookout for signs of staged accidents when collisions occur. The goal is for a higher percentage of these cases to result in arrests as time goes by, providing more of a deterring influence against the commission of the crime.  The more fraud that occurs, the less of a chance a given company can offer you an auto insurance discount, so it's important to be aware of this issue.

In the Tampa area, NICB launched a major public awareness campaign utilizing billboards and bus advertisements among other means to encourage people who witness a staged accident to call and report it so that those who commit these crimes are brought to justice and the law abiding car insurance consumers in the state can keep their rates more affordable. The hope is that the increased visibility the campaign brings to the issue will naturally lead more people to pay attention and participate in prevention efforts.

Auto insurance fraud is a huge problem in Florida and the rest of the country and everything drivers can do about staged accidents and other actions ultimately helps hold down the insurance premiums they pay.


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