Insurance fraud is on the rise and motorists in the hardest hit states governed by no-fault insurance laws are footing the bill.
Staged accidents and the exorbitant fake medical bills that follow are at the heart of a problem that is resulting in a “fraud tax” on auto insurance premiums of as much as 20 percent in some areas, industry experts say.
“Florida is Ground Zero for staged accidents in the U.S., bordering on out of control,” says James Quiggle, director of communications for the Coalition Against Insurance Fraud in Washington D.C.
Following right on the heels of Florida comes New York.
Miami is a hotbed for the organized staged accident rings and crooked medical providers and clinics who are responsible for racking up millions in phony medical bills charged to auto insurance companies.
“Collectively, staged accidents steal well over $1 billion a year. Those are costs that are inevitably passed down to honest drivers,” Quiggle says.
What’s more is that every driver is charged a fraud tax on his or her auto insurance premiums. In areas where staged accident rings are bleeding auto insurers for fake claims that tax is significant. In Florida, the typical two-car family pays nearly $100 in higher premiums every year thanks to staged accident rings and the damage they inflict, according to the Insurance Information Institute’s white paper “No-Fault Auto Insurance in Florida.”
If the trend continues, experts predict Florida’s fraud costs related to no-fault auto insurance could rise significantly to $1 billion by the end of 2011. The Coalition Against Insurance Fraud details the types of fraudulent accidents as well as what they can cost you in the long run.
