Insurance Fraud in Florida: How It Affects Your Rates

Florida has a significant insurance fraud problem that affects every policyholder. Fraudulent claims drive up costs for everyone. Here is what you need to know about fraud and how it impacts your rates.

The Fraud Problem in Florida

Florida consistently ranks among the worst states for insurance fraud, particularly:

Staged Auto Accidents

Criminal rings stage or cause accidents to file false injury claims. Common schemes include:

• Swoop and squat (cutting off a vehicle and braking suddenly)
• Side swipe (deliberate collision while changing lanes)
• Drive down (waving someone into traffic, then hitting them)

Property Insurance Fraud

Florida has seen significant property fraud including:

• Inflated or fabricated claims after storms
• Roof repair schemes with kickbacks
• Water damage fabrication
• Assignment of Benefits abuse

PIP Fraud

Personal Injury Protection fraud involves:

• Fake or exaggerated injuries
• Medical providers billing for unnecessary treatment
• Patients and doctors conspiring to inflate claims

How Fraud Affects Your Rates

Insurance companies must collect enough in premiums to pay all claims, including fraudulent ones. When fraud increases:

• Insurance companies pay more in claims
• They raise premiums to cover losses
• Honest policyholders pay more
• Some insurers leave Florida entirely
• Less competition means higher prices

Estimates suggest fraud adds hundreds of dollars annually to the average Florida insurance premium.

Assignment of Benefits (AOB) Issues

AOB allows you to sign over insurance benefits to a contractor. While sometimes legitimate, it has been widely abused:

• Contractors inflating repair costs
• Unnecessary litigation against insurers
• Homeowners unaware of what they signed
• One-way attorney fees driving up costs

Protecting Yourself

• Never sign an AOB under pressure
• Get multiple repair estimates
• Read everything before signing
• Contact your insurance company first

Red Flags for Fraud

Be wary of:

Contractors

• Soliciting door-to-door after storms
• Offering to pay your deductible
• Pressuring you to sign documents quickly
• Claiming your roof is damaged when it looks fine

Medical Providers

• Recommending treatment at clinics advertising on billboards after accidents
• Extended treatment plans for minor injuries
• Transportation to specific doctors after accidents

Attorneys

• Approaching you at accident scenes
• Promising large settlements
• Encouraging exaggeration of injuries

Your Role in Fighting Fraud

Be Honest

• Report claims accurately
• Do not exaggerate damage or injuries
• Do not include pre-existing damage in claims

Report Suspicious Activity

If you suspect fraud, report it to:

• Your insurance company
• Florida Department of Financial Services fraud hotline: 1-800-378-0445
• Local law enforcement if criminal activity is involved

Legislative Efforts

Florida has enacted reforms to combat fraud:

• AOB reform limiting one-way attorney fees
• Roof claim limitations
• Enhanced fraud investigation requirements
• Stiffer penalties for fraud convictions

As fraud decreases, rates should stabilize over time.

Have questions about legitimate claims? Contact Anchor & Atlas Insurance for honest guidance.