Eye-popping facts and statistics on rising auto insurance fraud here and nationally cannot be ignored. The NICB recently released a report showing a 14 percent rise in all types of questionable claims in the U.S. for the first half of 2010 over 2009, with a whopping 527 percent increase in questionable auto glass claims over that time period. In a separate report on staged accident claims from 2007-2009, the NICB put Florida in the number one spot for staged accident questionable claims with 3,006 staged accident questionable claims referred to the NICB by member companies. By comparison, the number two state was New York with 1,680 staged accident referrals to the NICB.

How is it possible that Florida is the epicenter for staged accidents? Point to PIP. The state's no-fault auto insurance law requires $10,000 of personal injury protection (PIP) coverage, and that's a pocket being picked by criminals, shady medical clinics, and certain lawyers willing to sue over a scratched fender.

Fake insurance claims, along with fraudulent inflation of bills for car damage and injuries, cost the industry millions. The dramatic rise in PIP fraud is a direct result of the depressed economy, so while that explains the increase, it remains an illegal practice. Some people may not even be aware they are perpetrating fraud, especially when bombarded by advertisements touting 1-800-Call businesses that imply entitlement to the $10,000 PIP benefit. Obviously, many TV viewers believe that guy in the police-look-alike uniform when he says to call the attorney and medical referral service first, not their insurer. Apparently they miss the small print on the screen that says he's a paid actor.

Matching the PIP pocket pickers dollar-for-dollar in advertising to inform policyholders to call us first is one strategy to counter adversarial ads; however, a more practical approach would be to educate at the point of sale and every other chance we get.

As an industry, we talk amongst ourselves about questionable claims. Customers might like to learn about what we question — and why. PIP makes a payday for scammers, and the questions we ask ensure that we pay what we owe so that policyholders get lower rates. In its annual report for 2008-2009, the Florida Division of Insurance Fraud stated that 30 percent of its referrals relate to PIP fraud. If you need more clues that things are out of whack, consider that we are driving safer cars and fewer miles, while accident severity is increasing and frequency is trending up after years of decline.

Teaching policyholders how not to be victims of staged accidents is another tactic. There are innocent victims who would appreciate our help in bringing a sense of skepticism to a suspicious accident. The NICB has a brochure on staged accident fraud on its web site in both English and Spanish with tips, including the suggestion to carry a disposable camera in your car. Most people have cell phone cameras and using that at the crash scene counteracts the urge by scammers to inflict additional damage on their car after the incident to inflate the cost of the claim. Our customers should also be leery of an accident in which the other vehicle has multiple passengers. Too many times, those uninjured passengers claim injuries in the next day or two.

Consider ways to help policyholders develop their own "fraud radar." For example, if they are approached at the car wash or shopping mall by someone who points out a microscopic chip in their windshield, their fraud radar should tilt into high alert. Scammers are first making sure victims have comprehensive insurance coverage (which is none of their business), then leading people to believe that a tiny chip leads to a windshield explosion and that they must — immediately — go to their scam ally in the auto glass replacement business to get it fixed.

The problem is that the windshields are not up to insurers' standards, yet the bills to insurers are for dealer-grade quality. Policyholders should know about this scam scenario and also understand that they are being solicited to file an insurance claim. Florida is one of only four states allowing no-deductible windshield replacement, and scammers take advantage of that.

It's easy to talk about ways to avoid being victimized by those who prey on innocent motorists, but very difficult to help people resist the urge to take financial advantage of their involvement in a car accident. The Florida Division of Insurance Fraud has an approach: They say reporting PIP fraud pays more than participating in it. Providing information that leads to an arrest and conviction could bring the tipster up to $25,000. The statewide fraud agency has won about 1,000 convictions since 2003, and it is getting more fire power with additional staff coming on board.

Most people do not know that insurers are required to have internal claim investigation units who look at suspicious claims and work with law enforcement when necessary. We should be telling them. Aggressively fighting suspected fraud keeps down the cost of insurance. The Coalition Against Insurance Fraud produced a report in 2008 titled "Four Faces of Insurance Fraud." It showed that consumers have a high tolerance for insurance fraud, with one in five U.S. adults saying it is acceptable to defraud insurers under certain circumstances.

I don't know what those "certain circumstances" may be, but insurance fraud is an opportunistic crime. It seems logical to explain that when an opportunity to commit fraud knocks, wise people do not open the door.

Lynne McChristian is the Florida representative for the Insurance Information Institute. She may be contacted at 813-480-6446, [email protected]. Also, see www.InsuringFlorida.org for her insurance blog, "Straight Talk."