Jeff Atwater is the chief financial officer of the state of Florida. The numbers and issues he relates in the following letter will teach you why we all have to pay higher and higher insurance premiums. This kind of nonsense is happening all the time, in all the states. Check out his letter then resolve to be on the look out to help curb this horrible cost.
As swirling conversations about rising insurance rates continue in Tallahassee, I’d like to talk with you about one reason for those rises that may not be top of mind: fraud.
The FBI estimates that the total annual cost of insurance fraud in our country tops $40 billion, and that doesn’t even include health insurance fraud. When you break that number down, it comes out to roughly $500 per family per year in increased premiums.
There are as many types of insurance fraud as there are types of insurance, and crooks seem to always find a way to cheat the system.
Our insurance fraud and arson investigators recently ran across an outrageous case that outlines just how bold some of these criminals can be and just how quickly thousands of dollars can be stolen.
Late last year, a man from Orange County reported that his car, a 2016 Toyota Camry, had been stolen in the state of New York. A terrible ordeal, but it happens and that’s what insurance is for.
Imagine the man’s surprise when just a few months later, his car is found on fire near Orlando. He’d already filed an insurance claim worth $10,000, and when the local fire department asked our arson investigators to look into the cause of the blaze, they quickly became suspicious.
As the story unfolded, the man ultimately confessed that he paid someone $300 to destroy his car and to make sure it was never seen again. Why would anyone do that? Maybe he was tired of making his payments or perhaps he wanted a different car to drive. Whatever the reason, the fact remains: By stealing from his insurance company, he’s causing all of our insurance rates to rise.
Now he faces 20 years in jail, but the reality is that this sort of thing happens frequently.
It happens when people intentionally inflict damage to their homes or when they stage automobile accidents. It happens when employers cheat their way out of paying proper premiums for workers’ compensation. It even happens when people fake injuries to get out of going to work.
Insurance is a business just like any other, and insurance companies can’t afford to absorb $40 billion in fraud without raising prices.
I think we can all agree that no one enjoys paying more for their policies, and we must all do our part to help stop this cost driver.
If you see something that looks suspicious, say something. Our investigators are doing a great job, but they can’t be everywhere all the time. If you think there’s something they should look into, give us a call…
We’ll keep working, and I hope you’ll keep your eyes peeled.
Chief Financial Officer
State of Florida