Florida Drivers Paying For Auto Fraud

Florida is a hotbed for auto insurance fraud and the problem is growing worse, according to a new study from the Insurance Research Council (IRC).

The IRC findings confirm recent Insurance Information Institute (I.I.I.) analysis that staged accidents, excessive or unnecessary medical treatment and inflated or questionable claims are driving up the cost of auto insurance for Florida drivers.

Elements of fraud appeared in 10 percent of all Florida no-fault auto insurance claims – known as personal injury protection (PIP) claims – closed in 2007, according to the IRC.

Almost one in every three no-fault auto insurance claims closed in Florida in 2007 appeared to involve the exaggeration of an injury or to be inflated by unnecessary or excessive medical treatment. The IRC sums up the problem:

The apparent amount of fraud and excessive billing by some health care providers in Florida is growing rapidly. Although these findings describe conditions of more than three years ago, indications are that the situation has continued to deteriorate.†

The IRC found that average no-fault claim losses per insured vehicle grew 55 percent in just the last two years, from $100 in 2008 to $155 in 2010. Claim fraud and abuse were major factors in that growth.

Some 30 percent of Florida claims appear to involve either overbilling or excessive utilization of medical services, known as claims buildup.

I.I.I. analysis recently found that no-fault fraud has already cost Florida vehicle owners and their insurers an estimated $853 million since 2008. The cumulative costs from 2009 through 2011 could exceed $1.5 billion if current trends continue.

I.I.I. Florida representative Lynne McChristian has more on this story in her Straight Talk blog.

Check out the I.I.I. white paper No-Fault Auto Insurance In Florida.

Check out further I.I.I. information on insurance fraud.

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