There is no question that insurance fraud costs Americans billions of dollars annually. According to the Coalition Against Insurance Fraud (CAIF), the business of fraud costs the industry an estimated $80 to $120 billion each year. Of course, this translates to increased insurance premiums, which has a negative impact on not only the consumer, but also on the economy in general.
According to most sources, the problem is only getting worse. For instance, the Insurance Information Institute (I.I.I.) studies show that “staged accidents” increased 52 percent in the state of Florida from 2009 to 2010. CBS Evening News just ran a special report exposing not only the fraud, but just how easy it is to pull off.
During a recent presentation of non-industry professionals, I shared statistics related to fraud, such as Florida drivers paying $549 in additional premium specifically as the result of staged accidents. As industry veterans, many of us have become so attuned to the problem that we do not realize that most outside the world of claims are unaware of its existence. My audience, for example, was shocked to learn that 32 percent of all billings for auto accident-related injuries in the state of Florida are for services never even rendered.
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