Florida drivers could be paying “fraud tax” with auto insurance

Fraudulent insurance claims by drivers in Florida have cost vehicle owners and insurers nearly $1 billion since 2008, according to recent analysis by the Insurance Information Institute (I.I.I.).

The I.I.I’s recent analysis pointed out that the typical two-car family in the state could be paying what amounts to a “fraud tax” of up to $100 associated with their Florida auto insurance premiums due to fraudulent behavior associated with the state’s current no-fault auto insurance system.

Staged auto accidents, excessive medical treatment, and other fraudulent behavior have already cost both the insured and the insurers an estimated $853 million since 2008, the I.I.I says.

Based on the current trend discovered in the analysis, the costs from 2009 through 2011 could reach $1.5 billion or higher.

“There are more auto insurance claims and a higher percentage of them seem to require extensive medical treatment. This is a costly combination that only offers one reasonable explanation, fraud and abuse of the no-fault auto insurance system is being paid for by all drivers, and steps must be taken to reverse this course,” said Lynne McChristian, Florida’s representative for the I.I.I.

In the meantime, drivers in Florida can compare local auto insurance rates and take matters into their own hands to some extent. By finding more affordable auto insurance coverage, Florida drivers can potentially offset any possible “fraud tax” that they may already be paying.

Source: Dailyrosetta.com

Tags: auto insurance, Car insurance, Florida auto insurance, Insurance tips

Posted by FinanceAZ on Apr 5 2011. Filed under Auto insurance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry