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VEHICLE INSURANCE FRAUD IN FLORIDA
Florida
Auto Theft Intelligence Unit (FATIU) survey of law enforcement
officers points out serious insurance fraud problem in Florida;
pre-insurance inspection highlighted as effective deterrent.
Fort Myers,
FL, December 15, 2005 — A survey conducted recently by the
Florida Auto Theft Intelligence Unit (FATIU) at its September
Quarterly meeting held in Fort Myers, FL, crystallized the need
for more effective vehicle-related anti-fraud programs to deter
widespread insurance fraud in the State. Florida’s national
ranking for vehicle theft is Number Three, according to the
FBI’s 2004 Uniform Crime Reports. On the list of “Most Dangerous
States,” published by the Morgan Quitno Publishing Company
(Crime State Rankings), Florida 2005 ranking is Six; in 2004 it
was Number Seven.
The Southern portion of the country, the nations most densely
populated region, which accounts for nearly 36% of the nation’s
population, had an estimated 34.5% of all motor vehicle theft.
In 2004, according to FBI statistics, more than 78,000 motor
vehicle thefts were reported, with a vehicle reported stolen
every 6.7 minutes. In the opinion of experienced law enforcement
professionals, between 20-30 percent of these reported thefts
were attempts to defraud an insurance carrier.
Focus of the survey
The purpose of this survey is to better understand how a
representative sampling of Florida’s law enforcement
professionals perceive the nature and extent of vehicle
insurance fraud, how to deter it, and the tools needed to make
the role of law enforcement more effective and productive.
Objectives
The Vehicle Insurance Fraud Survey has a dual purpose: to
benefit from the experience of law enforcement personnel in
detecting fraudulent activities and to make law makers aware of
the nature and scope of insurance fraud so that appropriate
legislation can be implemented. The net gains will be in the
form of more effective tools and systems to deter both organized
syndicates and dishonest individuals from benefiting from
criminal activities. Because insurance fraud is an economic
crime that transfers money from honest citizens into the pockets
of criminals, it’s important not only to be on the alert for
perpetrators of fraud but to have effective deterrents in place.
Survey Information
The data received as the basis of the survey was obtained from
law enforcement professional from various geographic sectors
throughout Florida. The respondents were participants in FATIU’s
Quarterly Training Meeting, held in Fort Myers, FL, in
mid-September 2005. Virtually all the participants were directly
or indirectly involved in the investigation of vehicle-related
crimes, including insurance fraud: 60% - law enforcement; 20% -
insurance industry; 14.5% - Department of Motor Vehicles; 5.45%
in other vehicle-related disciplines.
SURVEY
PARTICIPANT RESPONSES
Question: Do you think that a significant vehicle
insurance fraud problem
exists in Florida, and how prevalent is the problem?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Minor |
0% |
B.
Major |
73.0%69.0 |
C.
In-Between |
27.0% |
Question: What type of Insurance Fraud do you think is
most prevalent in Florida?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Property-Related Fraud |
74.5% |
B.
Personnel Injury Fraud |
25.4%69.0 |
Question: What types of vehicle insurance fraud have you
seen or heard about, in Florida, during the past two years?
Response:
• Staged accidents & alleged injuries
• PIP fraud
• Cloned Vehicles [“paper cars”]
• Owner give-ups
• Owner initiated arson
• False theft reports
• Stolen titles
• Fraudulent titles
• Insurance of vehicles with existing damage
• Staged auto theft
• Fake titles for previously stolen vehicles
• Salvage frauds
• Identity theft
• Falsified theft claims for total loss pay-off
• Claimed water damage
• Rebuilt vehicle frauds
• Non-existent vehicles
Question: What type of vehicle insurance frauds do
you think are the most prevalent in Florida?
Response:
• Salvage frauds
• Paper cars
• False injury claims
• Cloned vehicles
• Title fraud
• Auto body shop frauds
• Exaggerated repair claims
• False theft claims
• Overvaluing accessories
• Arson on claims
• Staged accidents
• Owner give-ups
• PIP fraud
• Counterfeit VINs
Question: Of the cases that you have investigated
during the past two years involving reported vehicle theft,
or others, what percentage do you believe were attempts to
defraud an insurance company?
% OF PARTICIPANTS ANSWERED |
% ATTEMPTS TO DEFRAUD AN INSURANCE CARRIER, BY INCIDENT |
2 -
4% |
4.8% |
05% |
2.4% |
10% |
14.3% |
15% |
7.1% |
20% |
14.3% |
25% |
11.9% |
30% |
9.5% |
40% |
9.5%69.0 |
50% |
4.8%69.0 |
65% |
2.4%69.0 |
60% |
7.1%69.0 |
75% |
7.1%69.0 |
100% |
4.8%69.0 |
Question: Do you feel that Florida’s existing vehicle
inspection law is effective?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Yes |
0% |
B. No |
27.0%69.0 |
C.
Somewhat |
51.0% |
Question: Do you think that the addition of photos could
improve the effectiveness of the inspection program in
Florida?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Yes |
90.9% |
B. No |
0%69.0 |
C.
Somewhat |
9.09% |
Question: Are you familiar with how information acquired
during vehicle inspection is used as part of an inspection
database system?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Yes |
24.0% |
B. No |
51.0%69.0 |
C.
Somewhat |
25.0% |
Question: From your experience, what types of fraud do
you think the inspection process, with photos, could deter?
Response:
• Falsified damage reports
• Adjustments to property claims
• Cloned vehicles
• Insurance of non-existent vehicles
• Total loss payoff frauds
• Claims for prior damage
• Paper car frauds
• Salvage and rebuilt vehicle claims
• VIN switching
• Inflated equipment claims
• Title frauds
• Body shop scams
• Salvage frauds
• VIN tampering
Question: Would the availability of a Florida vehicle
inspection database, complete with photos, significantly
improve your “tools” and investigative capabilities?
CATEGORY / DESCRIPTION |
PERCENTAGE |
A.
Yes |
88.5% |
B. No |
0%69.0 |
C.
Somewhat |
11.5% |
Survey
Summary
The results of the Vehicle Insurance Fraud Survey indicate
that insurance fraud, as a major component of vehicle crime,
is of considerable concern to law enforcement professionals,
including insurance company Special Investigative Units (SIUs)
and DMV investigators. In quantifying the response, based on
individual perception as to the prevalence of vehicle
insurance fraud in Florida, 73% responded that it was a
major problem, with 74.5% feeling that property-related
fraud was the most common occurrence.
It should be noted, with regard to the outstanding job being
done by law enforcement and the state’s insurance fraud
group, that Florida’s Department of Insurance Fraud has the
highest rate of insurance fraud investigation and arrests in
the country.
With regard to the need for better systems and investigative
“tools”, 88.5% of the responses felt that the availability
of a comprehensive inspection program was desirable. And
while only 51% of the survey participants felt that
Florida’s existing inspection law — was only “somewhat”
effective, and 27% felt that it was not effective, 88.5%
felt that the availability of a comprehensive inspection
database — complete with photos, would significantly improve
the capabilities of law enforcement. Regarding the addition
of photographs, 90.9% felt that this would improve the
effectiveness of Florida’s inspection program.
About FATIU
The Florida Auto Theft Intelligence Unit (FATIU) was founded
in 1972 in response to the growing auto theft problem facing
Florida. FATIU’s purpose is to help those professionals auto
theft investigators to exchange information about auto theft
and to train law enforcement officers and prosecutors on how
to solve and prosecute auto theft cases. As the membership
grew (today FATIU has in excess of 450 members), FATIU
became involved in training law enforcement officers and
prosecutors in the areas of boat theft, heavy equipment
theft and insurance fraud. FATIU is a not-for-profit
organization and is affiliated with the International
Association of Auto Theft Investigators (IAATI).
FATIU also works with prosecutors and legislators on
proposed legislation that will affect auto/marine theft and
insurance fraud. FATIU also has quarterly training classes
that are held around the state. These classes are open to
law enforcement, the car rental industry, the insurance
industry and any other professionals who are interested in
attempting to curb auto/marine theft and insurance fraud.
For additional information about FATIU please visit
www.fatiu.org
For additional information about pre-insurance vehicle
inspection as an insurance fraud deterrent, please contact:
Hal Denstman
MediaCom Communications
908/276-8849
Hdenstman@comcast.net