Florida Auto Insurance Scheme Busted
As America’s economic downturn continues to make its way onto headline news, many are attempting to pad their own pockets by preying on the desperate through faulty auto insurance claims, including a Florida crime ring that was recently brought to justice. The ring targeted people who were desperate to make their car payments or unload their expensive cars. The scheme promised to get rid of the cars for a cost, and told owners to report the vehicles as stolen and subsequently file auto insurance claims. However, the group then sold the expensive cars at low prices and outfitted new buyers with faulty titles, insurance cards, and registrations.
Thanks to Florida police, some arrests have already been made and detectives have recovered 33 cars, although authorities are still searching for 27 vehicles and a person of interest. Although the Florida case might be the most recent car insurance fraud scheme to hit the news, it certainly isn’t alone. Fraudulent car insurance claims are on the rise because of the worsening economy, according to ABC News, driving desperate drivers to go as far as lighting their own cars on fire.
According to ABC News and Insurance Research Council, car insurance fraud is a risky practice that poses potential danger to everything from a person’s physical safety to car insurance policy holders’ economic security, including fluctuating auto insurance rates. Car owners who attempt to rid themselves of expensive vehicles by setting them on fire or otherwise destroying them can suffer physical damage, like one Nevada man whose attempt at fraud resulted in second and third degree burns. Insurance fraud is also a crime, which can result in jail time for the perpetrator. Perhaps more damaging to the car insurance industry as a whole, however, is the fact that car insurance fraud, including fraudulent car insurance claims, make auto insurance rates increase for millions of U.S. drivers.
According to ABC News, car insurance claim payouts increased by $4.8 to $6.8 billion as a result of fraud in 2007. And because car insurers must recoup what they’ve lost, this means auto insurance rates have been on the rise for drivers everywhere. Other costs of car insurance fraud include the fact that drivable cars are being taken out of the market, meaning higher prices for used and new vehicles everywhere. Although stopping car insurance fraud is the job of law enforcement, it is important to note that the cost of failing to make car insurance payments is lower than the cost of committing car insurance fraud.
