Florida Targets Insurance Fraud in Crackdown

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Florida offers hundreds of miles of coastal beaches and lots of insurance fraud.

While it may offer the best overall experience for motorcycle riders, the sunshine state of Florida holds the ignominious distinction of being one of the nationwide leaders in car insurance fraud. According to the National Insurance Crime Bureau, which investigates and seeks to stop insurance fraud throughout the industry, Florida ranks second in the nation in questionable insurance claims, with California, the most populous state in the nation ranking first. Florida also ranks highly in other questionable areas, including having the fifth highest percentage of uninsured drivers.

The biggest issues in Florida stem from its no fault insurance system, which fraudsters use to exploit the personal injury protection (PIP) coverage with questionable claims. Frank G. Scafidi, a spokesman for the National Insurance Crime Bureau, says “It is a great system. It essentially was created for all the right reasons, but unfortunately it’s been abused over the years.”

But authorities in Florida aren’t simply settling for the environment as it currently exists. A new law that took effect on July 1 adds additional civil and criminal penalties for engaging in insurance fraud, and the Florida Department of Financial Services, which handles insurance matters, including fraud, has stepped up enforcement.

Thus far in 2011, they’ve arrested more than 200 individuals suspected of engaging in personal injury protection fraud. In the same period last year, the Department of Financial Services had only arrested 130 people – arrests are up 55 percent in just a year.

Florida residents don’t have to settle for simply accepting higher insurance premiums as a result of car insurance fraud, and the state Department of Financial Services offers a toll-free number – (800) 378-0445 – that can be used to report suspected insurance fraud.

The Anti-Fraud Reward Program offers rewards to whistleblowers of up to $25,000 for providing information leading to arrests and convictions in any insurance fraud scheme. Thus far, 40 persons have used the hotline and received rewards from the program, totaling a quarter of a million dollars.

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