The accountant tapped the bumper of the van in front of her while creeping along in Tampa's rush-hour traffic. The van's driver said he was fine. Then he called an accident referral service.
When the dust settled months later, the bills topped $52,000, all paid by the accountant's car insurance company.
That kind of outcome isn't surprising in Florida, where staged auto accidents, exaggerated injury claims and other kinds of auto insurance fraud and abuse were expected to cost Floridians $658 million in higher premiums last year.
The Insurance Research Council estimates that one claim in 10 made under Florida's no-fault insurance system is outright fraud, and one in three is exaggerated or overbilled. About 27% of personal injury protection claims involve a visit to a pain clinic, the IRC says, while one-third of them involve an MRI, and 43% include chiropractic care.
TV and radio ads from lawyers, accident referral services and pain clinics crowd the airwaves. People involved in auto accidents are urged to call a referral service immediately, with the implication they can receive big bucks for their injuries.
One clue to their clout: The Florida State Fairgrounds' new performing arts venue in Tampa is called the 1-800-ASK-GARY Amphitheatre. A referral service owned by a Sarasota chiropractor bought the naming rights last year.
An accident -- or an opportunity?
Much of the blame has been laid at the feet of Florida's no-fault insurance law, which requires all drivers to carry $10,000 in personal injury protection coverage for injuries suffered in a car crash, regardless of who was responsible for the accident.
Ads emphasize that amount.
"What people hear is: 'I've been in an accident. I'm going to get $10,000,'" says Lynne McChristian, an Insurance Information Institute spokesperson. In reality, the money usually goes to a highly developed web of medical practitioners and the referral services who scout out clients for them.
If someone calls a referral service, they're often sent to a pain management clinic, which may not be overseen by a doctor, McChristian says. Some of those clinics "exist just to fraudulently bill insurance companies."
Florida also ranks tops in the nation for questionable auto insurance claims tied to staged accidents, with more than 3,000 in 2009. That's nearly twice as many as New York and California, which ranked second and third respectively, according to the National Insurance Crime Bureau.
In other cases, car owners have conspired with auto body shops to set off air bags, helping to total out cars on which they no longer wanted to make payments.
"Innocent people's insurance is underwriting all this fraud," says Frank Scafidi, spokesman for the NICB.
Suspicious activity runs the gamut. Scafidi says it might involve things such as:
- Claiming an accident occurred when it never did.
- Driving a vehicle into a tree, then saying it was a hit and run.
- Inventing an accident to explain existing damage.
More frightening are organized fraud rings, where several people working together climb into a car and drive in a way that causes an innocent motorist to rear-end the vehicle. The members of the fraud ring then claim everyone in the vehicle that was hit sustained soft-tissue injuries, which don't show up on X-rays, Scafidi says.
"The no-fault system just makes it easier and more lucrative" to perpetrate fraud, he says.
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