Why Insurance Fraud in Florida is on the Rise

By Henry Fleet

Faltering economic conditions such as for closure rates, prices of gasoline and grocery, as well as the unemployment rate skyrocketing has made insurance fraud in Florida a particularly booming area of criminal activity. Several state and national organizations have made efforts to curtail the issue, as well as collecting data on the particular area of impact that this has caused. However, it is difficult to ascertain the direct statistics on this as the information is not readily available to put together a more complete picture. Agencies are currently focusing, instead, on perhaps identifying red flags and risk factors, as well as projecting potential scams, frauds and being able to protect the public from these issues.

Almost every form of insurance is susceptible to fraud, but the areas that many Florida insurance buyers are being targeted with seem to be predominately the areas where people are the most vulnerable. Disability claims, workers' compensation premiums, vehicle and marine claims, various home owner insurance frauds are all currently on the rise, many also in tandem with arson. In many cases, vehicles were simply abandoned, or torched. Florida also saw quite a rise in the number of staged accidents.

Ironically, it also seems that as insurance fraud rises, the economy takes another hit as more shady lending practices rise to meet the growing need for loans and financial solutions. More and more frauds emerge, as more and more find themselves in need of loans that they would not ordinarily qualify for. Florida has seen a great rise in fraudulent workman's comp claims as well as disability fraud due to more and more companies and employers being forced to cut costs where they can.

Vehicle fraud itself has increased 24% in 2009, amongst Floridians, suspicious claims as to arson and other vehicle fires, also increased by 29% right alongside. Vehicles with less fuel efficiency, such as trucks, vans and SUVs seemed to make up the majority of those, as gas prices also saw an increase. One area of particular interest seems to be rings that actually enable people to get rid of their vehicles and collect the claims on them, for a percentage. Others still yet would leave the vehicles close to the shores, hoping in the wake of Hurricane Gustav, that the damage would be done without effort. Arson and fire related insurance fraud, the old standby has also seen a dramatic increase, in spite of the dangers, showing an overall increase in Florida of 33% in 2009, as well.

In a much higher level scheme, lenders were the culprit. Insuring the loans they made for vehicle owners, they would then encourage them to simply default on the loan- and rather than go through the lengthy and often complex process of repossessing, would simply writing them off as "Failure to Return" or theft, but this is now a red flag to investigators and as such, should begin to taper off somewhat in the future. The problem seems to be one that has already been identified, and as time goes on, the various agencies involved will continue to manage and try to eliminate.

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