Why Are Our Auto Insurance Rates Going Up?

We know many of our clients have been receiving their renewal offer from their auto insurance company and wondering why the rates seem to keep going up, even though they may not have had any tickets or filed any claims.  There are 2 main reasons:

• Fraud.  Auto Insurance fraud, while a silent crime, is one of the fastest growing crimes in America (and especially Florida). Unfortunately, due to the struggling economy, many are more eager to file claims and to exaggerate the severity of those claims.

  Some experts estimate that as much as 25% of all your premium dollars go to cover fraudulent claim costs!

  Fraud is not a victimless crime.  EVERY ONE OF US, either directly as a result of staged accidents or indirectly because of paying for fraudulent activity, is being hurt!

• PIP (Personal Injury Protection or NO-Fault) staging accidents.  These accidents are the cooperative efforts of people who claim to be hit as a pedestrian by a car, usually on a back alley, and witnesses testify that the car hit the pedestrian.  Then the attorney and either the medical injury clinic or chiropractor handles the legal paperwork and files up to a $10,000 eligible PIP claim.  Of course, it is all bogus and the participants split the insurance pot of gold, and you, the customer, watch your rates go up to pay for it.

  Florida is considered the worst state in the country for this fraud.  It was very prevalent in south Florida but due to strong law enforcement efforts there, it has moved to Hillsborough County and flourished. Recently, the Tampa Tribune reported that local law enforcement busted a huge PIP fraud organization right here in Tampa.

What can we do about it? Resist the temptation to do what so many are doing in exaggerating or being fraudulent. And don’t be shy about anonymously reporting any fraudulent activity to the police. You’re not just being a good citizen; you’re doing your part to help reduce everyone’s premiums!

Scott Love
October 14, 2010