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Florida Insurance Fraud Jumps on Intentional Crashes

 by Bloomberg.com
 Jun 29,2010

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(Bloomberg) -- Insurance fraud jumped in Florida as policyholders crashed their cars on purpose to generate medical claims, an industry group said.

Staged accidents surged 58 percent to 1,999 in 2009, the National Insurance Crime Bureau said today in a statement. Tampa led the increase as intentional crashes quadrupled to 487, the group said.

“South Florida used to be the focal point of these deliberate crashes,” NICB President Joe Wehrle said in the statement. “While the Miami and Hialeah areas continue to show increased activity, the criminals have expanded their operation northward and Tampa is now at the epicenter of this crime.”

U.S. car insurers, a group led by State Farm Mutual Auto Insurance Co., Allstate Corp. and Warren Buffett’s Geico, are seeking to identify doctors who handle the greatest number of claims suspected of fraud. Auto insurance fraud for coverage of bodily injury cost the industry $4.8 billion to $6.8 billion in 2007, and the expense has climbed since at least 2002, said David Corum, Insurance Research Council vice president.

Florida had the highest rates for bodily-injury and personal-injury-protection fraud in the review of 12 states which allow people to be reimbursed for accidents without proof of fault, the bureau said. The number of questionable claims for all insurance fraud jumped 15 percent in the state to 7,447 in 2009, compared with the year earlier, the group said.

The economic slump in the state may contribute to fraud, according to the group. Florida’s unemployment rate of 11.7 percent in May compares with a national rate of 9.7 percent, and is near the highest in the state in three decades.

‘Way out in Front’

“Florida is way out in front of the rest of the country in the number of questionable claims submitted,” said Ron Poindexter, director of operations for the NICB in the southeast U.S. “There is a link between the downturn in the economy and the increase in all types of insurance fraud.”

Nationwide, reports of casualty claims from staged accidents climbed 43 percent in 2009, according to a February statement by the NICB.

©2010 Bloomberg L.P. All Rights Reserved.


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