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Auto insurance fraud threatens area drivers

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By DAN TARANTIN

Special to The Tampa Tribune

Published: March 6, 2010

Every day, hundreds of thousands of drivers in the Tampa Bay area head onto local roadways to work, shop or play. Most of us aren't thinking that we're potential victims of fraud, or worse, that someone might intentionally crash into our vehicles.

But that's exactly what's happening in our area. Quietly, almost without warning, Tampa Bay has emerged in the past six months as a national epicenter of auto insurance fraud, including staged accidents and questionable claims, according to the National Insurance Crime Bureau.

Why should you care? For starters, this wave of fraud is driving up the cost of your auto coverage, as insurers must include losses sustained through fraudulent acts in the rates everyone pays - in fact, many auto insurers have recently filed for rate increases with state regulators. It's also making it harder for you to obtain coverage, as auto insurers are tightening underwriting standards to rein in mounting losses associated with fraud.

But worst of all, it is endangering your safety - you could be seriously injured if you are inadvertently caught up in a staged or caused accident, one in which fraudsters intentionally crash vehicles together in order to file injury reports and medical claims.

Often, these staged accidents are the work of organized fraud rings that use "runners" who solicit crash victims and steer them to unscrupulous medical providers. These crooked clinics then deliver questionable or unnecessary medical treatments that "max out" the drivers' and passengers' $10,000 in Personal Injury Protection (PIP) coverage required under Florida law.

Today, Tampa is the second-worst city in the country for insured losses related to staged accidents and questionable claims. Orlando is ranked fourth, and Miami is fifth. Overall, Florida is the single worst state in the U.S. for these auto fraud activities, according to the National Insurance Crime Bureau.

Why is this occurring in Tampa Bay and Central Florida? For sure, the economic recession is a factor, as some drivers are using fraud as a means of getting quick cash in a down economy. But organized auto insurance fraudsters have also migrated into Central Florida in the past year as a result of earlier crackdowns by law enforcement officials and auto insurers in South Florida.

Here in the Tampa Bay area, law enforcement agencies and auto insurers are responding aggressively. At Direct General - the auto insurance company I run - fraud-fighting operations have been dramatically beefed up, and the company's analytical capabilities have been enhanced to more quickly identify and address fraud. We're also working closely with state agencies such as the Division of Insurance Fraud and Department of Health, as well as the Hillsborough County Sheriff's Office, to root out organized fraud rings as well as those unscrupulous medical providers working alone.

But more tools are needed in this fight.

For starters, law enforcement should have ready access to resources sufficient to target and respond to the proliferation of fraud activity. In conjunction, there should be tougher penalties for fraudsters, including medical providers who allow or perpetuate fraudulent activity at or through their clinics. State laws should be strengthened to require more stringent documentation of all drivers and passengers involved in crashes. Often, these people pop-up repeatedly in accidents.

Finally, we need to do more: All Floridians can play an active role in reporting suspicious incidents to the state's Division of Insurance Fraud (800/378-0445), the National Insurance Crime Bureau (800/835-6422) or their auto insurance company.

It's time for Tampa Bay to begin its own crackdown, collectively send a clear and consistent message to auto insurance fraudsters and draw the proverbial "zero tolerance" line in the sand.

We need to take these criminals off the streets and put them where they belong - behind bars - for our community, and most importantly, for our safety.

Dan Tarantin is president and CEO of Direct General Corporation, which through its family of companies writes and sells auto insurance policies under the Florida No-Fault Auto Insurance and Cash Register Insurance brands.

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