One of the auto industry groups has said that an increasing number of policy holders in Florida are crashing their card on purpose so they can file for medical claims. This has led to an unprecedented increase in the number of insurance frauds over the past few months.
The National Insurance Crime Bureau, in its statement on 28th June, 2010, said that in the year 2009, 58% of the accidents were staged. In the city of Tampa alone these accidents quadrupled and stood at a whooping 487.
Joe Wehrle, the President of NICB said that initially it was just the southern part of Florida that was infamous for these staged crashes. However, with the passage of time, this has affected other parts of Florida, especially the northern region. While Hialeah and Miami were always on top of the list, Tampa now joins them as the epicenter of this auto insurance fraud.
Three major auto insurance players – State Farm Mutual Auto Insurance Co, Warren Buffet Geico and Allstate Corp – have formed a group and are trying to unearth doctors who are handling high numbers of suspicious fraud claims. This fraud is causing heavy losses to the auto insurance industry. The loss due to bodily injury fraudulent claims, in the year 2007, stood between $5 billion and $7 billion. The Vice President of Insurance Research Council, David Corum, said that from 2002, this expense has increased multifold.
One of the reviews over 12 states in the United States has revealed that Florida tops the list in terms of fraud committed under the personal injury protection and bodily injury segment. This is one of the states in the nation that provides reimbursement to people even without substantial proof, which can be considered as one of the reasons for the increase in the number of frauds. As compared to 2008, the number of fraudulent claims increased by 15% in the year 2009.
According to the industry group, one of the main reasons for the increase in the number of fraudulent claims could be the poor economy the state is reeling under. As compared to the national rate of 9.7%, the unemployment rate in Florida stood high at 11.7% in the month of May. This is the highest unemployment rate in Florida in the last thirty years.
One of the reports issued by the National Insurance Crime Bureau states that, on a national level, the overall casualty claims due to intentional clashes increased by 43% in the year 2009.