Auto insurance fraud is a common form of white-collar financial fraud. An example of common fraud is when a group of shady health care providers intends to cheat insurance companies by performing a fake accident and having the alleged victims file false claims and actually receiving a portion of the profits of such claims. Medical institutions such as physical therapists, pharmacies, dental clinics and orthopedic and medical supply companies are often included as participants in such claims as the injuries require various diagnoses for disability or chronic pain which may need prolonged or even life-long treatment.
At one time, this type of fraud was easier to commit undetected, as medical claims in general were paid quickly and with little scrutiny. Now, with the rising costs of medical care, and the increasing use of computerized systems to audit claims, insurance companies are able carefully inspect every claim, and their computer systems are designed to root out fraud. However, far too much fraud still goes undetected, and law enforcement has had to rely on informants rather than insurance companies themselves to break the rings and arrest the perpetrators of this costly form of fraudulent activity.
Recently, dozens of participants in an ongoing auto insurance scam were arrested in Florida. The scam was a very typical one, in which the first level of participants staged minor accidents but claimed that they had sustained injuries. The accident participants then had claims filed for them by a "fraud mill," a clinic which was set up by the masterminds of the scam solely to file insurance claims. The "fraud mill" simply asked the participants to sign insurance forms, which were then filled out by the illegal clinic and sent to various insurance companies. Since Florida drivers carry a mandatory PIP, or personal injury protection, policy as part of their auto insurance, there is no need to prove fault or to adjudicate any claims - they can simply be submitted for reimbursement to auto insurers.
In this case, it was the Florida Division of Insurance Fraud, with the assistance of the U.S. Secret Service, which put an end to the fraud. A spokesperson for the Florida Division of Insurance Fraud estimates that legitimate auto insurance policy holders have paid $50 extra in annual premiums because of the cost of these fraudulent claims. This means that, unless the industry takes measures to prevent this type of fraud before claims are paid out, it is the honest consumer who repays the money that was in essence stolen by the criminal rings.
Due to the number of fraudulent claims, insurance companies incur tens of millions of dollars in losses per year. With technology as sophisticated as it now is, efforts need to be made to prevent fraud long before it affects the insurer's bottom line and forces companies to raise premiums in fraud-heavy areas such as Miami-Dade County in Florida. Claims for personal injury protection insurance, in the state of Florida, have no judicial process to determine responsibility, which is partially why there are frequent cases of fraudulent claims in this state.
At one time, this type of fraud was easier to commit undetected, as medical claims in general were paid quickly and with little scrutiny. Now, with the rising costs of medical care, and the increasing use of computerized systems to audit claims, insurance companies are able carefully inspect every claim, and their computer systems are designed to root out fraud. However, far too much fraud still goes undetected, and law enforcement has had to rely on informants rather than insurance companies themselves to break the rings and arrest the perpetrators of this costly form of fraudulent activity.
Recently, dozens of participants in an ongoing auto insurance scam were arrested in Florida. The scam was a very typical one, in which the first level of participants staged minor accidents but claimed that they had sustained injuries. The accident participants then had claims filed for them by a "fraud mill," a clinic which was set up by the masterminds of the scam solely to file insurance claims. The "fraud mill" simply asked the participants to sign insurance forms, which were then filled out by the illegal clinic and sent to various insurance companies. Since Florida drivers carry a mandatory PIP, or personal injury protection, policy as part of their auto insurance, there is no need to prove fault or to adjudicate any claims - they can simply be submitted for reimbursement to auto insurers.
In this case, it was the Florida Division of Insurance Fraud, with the assistance of the U.S. Secret Service, which put an end to the fraud. A spokesperson for the Florida Division of Insurance Fraud estimates that legitimate auto insurance policy holders have paid $50 extra in annual premiums because of the cost of these fraudulent claims. This means that, unless the industry takes measures to prevent this type of fraud before claims are paid out, it is the honest consumer who repays the money that was in essence stolen by the criminal rings.
Due to the number of fraudulent claims, insurance companies incur tens of millions of dollars in losses per year. With technology as sophisticated as it now is, efforts need to be made to prevent fraud long before it affects the insurer's bottom line and forces companies to raise premiums in fraud-heavy areas such as Miami-Dade County in Florida. Claims for personal injury protection insurance, in the state of Florida, have no judicial process to determine responsibility, which is partially why there are frequent cases of fraudulent claims in this state.
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You can always save a portion of your income and put it in the bank for rainy days. Quite often, the most suitable premiums when it comes to auto insurance can be obtained over the internet when comparing costs through numerous insurance carriers.
