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Fake Crashes Drive Up Insurance Rates

Fake Crashes Drive Up Insurance Rates

Posted: 5/12/2011
Source: Tampa Bay News
By: Doug Smith, FOX 13 Investigative Reporter

TAMPA – Florida leads the nation and Tampa leads the state in questionable insurance claims, causing you to pay more for car insurance.

Most of these claims are the result of staged car crashes. Drivers fake an accident, then use Florida’s no fault personal injury protection law, or PIP, to file a claim.

Under PIP, each person can get up to $10,000 for medical treatment, regardless of who is to blame. If the cars or trucks in staged crashes are full of people, a single accident can be worth $80,000 to $90,000.

Clinics pay off the occupants of the staged crashes and then bill the insurance company for treatment that was never received.

State lawmakers say this type of fraud is an epidemic, and detectives who have followed the money say those involved have deep ties with organized crime.

“We have everything from drugs to extortion, human smuggling and money laundering,” says one Hillsborough undercover investigator whose job it is to infiltrate and bring down these fraud rings.

“They will stop at nothing to profit,” says a second undercover detective.

These detectives are part of the Strategic Response Section under Homeland Security. The state’s Chief Financial Officer is also frustrated by what he sees happening.

 

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“The rings are now using PIP like they would have used cocaine in the 70s. It’s their mechanism for getting their hands on money,” says Florida CFO Jeff Atwater. “They stage the accident; the people who’ve been placed in the car go to the clinic and run up the $10,000 limit, then stage another accident. This is a cash flow for fraud rings.”

Hillsborough County undercover investigators have seen up close and personal just how much money changes hands, and then funneled directly into the hands of organized crime families.

“Each clinic we’ve investigated, once you do the financial, is a minimum of a million dollars a year,” says one undercover investigator.

Law enforcement and the insurance industry are starting to take a high-profile approach. A few companies are now suing clinics in federal court to get back millions paid in what’s believed to be bogus claims.

Police are stepping up raids on clinics around the state. In October 2010, police raided and arrested clinic personnel who they say were involved in staged crashes using rented moving trucks.

They would rent a vehicle, purchase a cheap insurance from the company and then stage a crash and collect.

Meanwhile in Tallahassee, during this legislative session, there was an attempt to re-write the law, but it never made it out of committee.

“It may be that if we cannot get it right, we’re going to have to eliminate PIP, and the good honest people might have to lose a product that’s served them for many years,” Atwater said.

Florida is one of only 12 states that still offer PIP insurance.

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A two-year comparison of PIP referrals to the Division of Insurance Fraud from the CFO.

County Calendar Year 2009 Calendar Year 2010 % Increase/Decrease
Dade 1273 1603 25.92%
Hillsborough 937 1639 74.92%
Orange 511 767 50.10%
Palm Beach 496 597 20.36%
Broward 325 442 36.00%
Lee 173 274 58.38%
Collier 111 148 33.33%
Polk 77 62 -19.48%
Pinellas 58 116 100.00%

 

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Here are some staged accident awareness tips from the National Insurance Crime Bureau. The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.

  • Maintain a safe distance between the vehicles in front of you.
  • Try to take photos of all vehicles and occupants.
  • Take photos of the location and vehicle damage.
  • If “witnesses” appear at the scene, take photos of them as well.
  • Avoid people at the scene who try to steer you to doctors, clinics and or attorneys.
  • Contact your insurance company and follow their advice.
  • Also, potential victims are asked to call the NICB Hotline at 1-800-TEL-NICB (1-800-835-6422). Cell phone users can also text the keyword “FRAUD” and their tip to TIP411 (847411). All tips can be anonymous.

The Florida’s CFO asks anyone with information about suspected insurance fraud is asked to call 1-800-378-0445. Individuals who provide tips can remain anonymous and are eligible for a reward of up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.

The Department of Financial Services to date has awarded almost $250,000 to approximately 40 citizens as part of its Anti-Fraud Reward Program.

For more information from the National Insurance Crime Bureau visit this site: Order Brochures & Posters
Source: MyFoxTampaBay

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