Insurance fraud hits every driver where it hurts the most: the cost of his or her car insurance policy premiums. These costs are especially high on residents of Florida, as it now leads the nation in auto insurance fraud, according to the National Insurance Crime Bureau (NICB). The NICB is a non-profit organization that receives support from nearly 1,000 property and casualty insurance companies that has a stated mission is to help identify, detect and prosecute those who commit criminal acts involving insurance.
Just how big an impact do Florida drivers take due to auto insurance fraud? More than $80 million in 2011, says NICB. Some criticize Florida’s no-fault auto accident law as making it easy for criminals to stage accidents for cashing in on insurance payouts. Florida’s law has a personal injury protection feature that requires insurers to pay up to $10,000 per occupant of a car, no matter who caused or is responsible for the accident.
While $80 million is a large amount of money, the impact on individual drivers and policy owners is approximately $50 added on to their annual premium, at least in 2010. For 2011, that amount is expected to increase to $83 added to every insurance premium. Considering there are more than 11 million drivers in Florida, the total costs for car insurance fraud in that state may soon pass $1 billion each year.
These staged accidents come in two distinct forms. One version uses two cars, where all the occupants are in on the operation. The other version sees criminals targeting innocent drivers as their victims.
The following graphic shows the top five cities in Florida for auto insurance fraud, and the number of confirmed staged accidents that took place in each of them in 2009: