Smart Auto Insurance Blog

I just read an article insinuating that car rental companies might actually be forging your signature to add car insurance to your rental that you didn’t even want.  Most car insurance companies cover a rental car if you need one while yours is getting fixed.  But car rental companies make money off of the additional things they charge you for, so there have been recent allegations that some rental companies are charging you for car insurance you don’t need or want.  Recently, Dollar Rent A Car at the Denver airport was accused of charging a Florida man for car rental insurance without his permission.  This information comes from The Seattle Times article “Is rental-car insurance a scam?,” by Christopher Elliott.

Dollar insisted that the Florida driver had signed his consent for $215 in car rental insurance and $53 in roadside assistance for the rental car he drove for a few days.  When the charges were disputed, Dollar sent a form letter to the driver.  But he also disputed the charges with his credit card company and they believed him and refunded his credit card.  Dollar sent a copy of the supposed signature adding the extra coverage and this particular driver says that it was forged.  Not only did he not sign opting for the extra charges, he didn’t even need that coverage because he had personal auto insurance to cover rental cars as well.

A lawyer and consumer advocate told The Seattle Times that there have been hundreds of other consumers saying that this same thing has happened to them.  Unfortunately many consumers give up after their initial dispute and pay the bill because they don’t think they have a chance to fight any further or don’t want to spend the time fighting in court.  Since there is no type of legislation or regulation on this matter by the federal government, car rental companies don’t have much concern over lawsuits here and there.  Employees working for minimum wage are often pressured to up-sell extra coverage and receive large commissions.  With e-signatures becoming the norm, car rental insurance fraud and other car rental extras might be easier for these employees to pull off.  Read everything you sign and keep copies, especially when it comes to dealing with companies that have a history of fraudulent complaints.

Check out our updated blog from May.  Florida’s auto insurance laws changed in July and many individuals and consumer groups are not happy.

http://www.smartautoinsurance.com/blog/2012/05/make-pip-auto-insurance-claims-right-away/

UPDATE 8/7/2012

A few months ago, we wrote about the changes being made to Florida’s auto insurance laws.  A MarketWatch press release shows how disappointed many Floridians and consumer groups are with these changes.  In “Opponents blast auto insurance reform, medical care cuts,” we learn that many opponents of Governor Scott’s auto insurance changes believe that they are only in the best interest of auto insurance companies.  Governor Scott disputes those claims and says the main purpose for these changes is to cut down on fraud and eventually lower Florida’s cost of living.

In July, around 150 new laws took effect, including the limitation of medical benefits that will be paid out and the stipulation that injuries must be reported within 14 days of a car accident.  The government in Florida says that the $1.4 billion that personal injury protection claims have increased over the past 4 years is largely due to fraud in the insurance market.  Now that PIP benefits are capped at $2,500 unless an “emergency condition” is reported by a valid medical professional, Governor Scott believes there will positive strides in Florida’s auto insurance marketplace.

But opponents say that many terms in the new laws are too vague, such as what constitutes an “emergency medical condition” and what providers can be seen.  Chiropractors, acupuncturists, and physical therapists say they are concerned that people will develop many more chronic conditions after car accidents because they aren’t getting reimbursed for seeing these types of providers.  They government disagrees with these claims and is trying to assure Floridians that they will be treated for their valid medical claims following a car accident.  They say they are just trying to get rid of the rampant fraud caused by many of the things they have changed or banned.

The most important thing to remember if you are a Florida driver is that you have to file any medical claim within 14 days of a car accident.  Once you have done that, follow the exact procedures listed under the new laws so that you will be reimbursed by your car insurance company.  Despite the battle between consumer groups and the government, you need to follow the laws until they change, if they do.

5/5/2012

After years of debate, changes have been finalized for Florida’s PIP auto insurance.  According to Tampa Bay’s Fox 13 News, Jeremy Campbell says “Car insurance changes (are) coming soon.”  Rick Scott, Governor of Florida, signed a bill this week that will take effect on July 1st of this year.  Auto insurance companies and lawmakers have been working for years to battle fraud related to Florida’s Personal Injury Protection (PIP) insurance.  They say that these changes will help to lower auto insurance rates because the fraud was out of control.

What will the new bill change?  First of all, Florida drivers will have to seek medical attention for any injuries related to an automobile crash within fourteen days of the occurrence.  At one point, there was no cap on the amount of time that could lapse between an accident and receiving medical treatment.  Unfortunately, some drivers were abusing the PIP system and seeking treatment for injuries or medical conditions unrelated to the crash quite a time later.

Drivers will also have to seek this medical attention from a certified medical doctor or dentist.  They cannot go to see a chiropractor or a holistic type of healer for care if they have been injured in an automobile accident.  The amount of benefits you can be paid has now been capped at $2,500, unless a certified doctor says that you have an “emergency medical condition.”  The cap used to be $10,000, so this is quite a significant change.  If you live in Florida and need to use your PIP insurance, make sure to have your claim documented by a medical professional within fourteen days of your accident.

Auto insurance fraud is a serious problem and it ends up costing American drivers billions of dollars.  The more auto insurance fraud that is committed, the higher auto insurance rates must be to combat the fraud dollars lost.  The Coalition Against Insurance Fraud estimates that insurance fraud costs Americans around $80 billion per year.  This outrageous statistic worries insurers as they try to keep prices down for their customers.  Not only does it hurt American drivers, but it hurts the insurance company’s bottom line.

First Acceptance Insurance, a provider of quality auto insurance in the industry for over 100 years, is taking steps to limit the amount of fraud affecting their company.  They’ve outlined the necessary steps to take if fraud is suspected.  They offer phone numbers, and emails including information for the National Insurance Crime Bureau.  There’s an email for Special Investigations Unit which is dedicated to stopping fraud in its tracks.  Taking the time to report suspicious behavior is greatly appreciated by these fraud units.

Representatives are available to talk to individuals about potential fraud situations.  They are trained to recognize fraud early in hopes that dollars can be saved and the losses aren’t passed onto honest drivers following the rules.  During these tough times, perpetrators are feeling desperate and are turning to dishonest practices to make money.  Even small embellishments on insurance claims can add up to big costs that hurt the entire insurance industry.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Auto insurance fraud continues to be a major problem across the nation and it’s affecting how much everyone pays for their car insurance quotes.  With proper monitoring, it’s possible to decrease the amount of fraud out there but it needs to be a group effort.  South Carolina Attorney General, Alan Wilson, stated that about $12 million was reported in South Carolina alone last year in auto insurance fraud.  This was found in a recently released report according to the article by Jessica M. Karmasek on the Legal Newsline website.  This astounding number needs to come down but it’s hard to determine exactly how to do this.

Falsified claims are the number one cause of auto insurance fraud and this is why most auto insurance companies have a claim review team in place.  Suspicious claims are sent to an expert department for review and if considered possible fraud the claim will be investigated.  Unfortunately, the downside to this process is that not all of the suspicious claims are truly fraud so innocent people end up getting the run around when submitting a claim.

With online auto insurance quotes a popular method for obtaining auto insurance, it’s no surprise fraud on the internet is happening.  Most companies, including First Acceptance Insurance and Progressive, offer quotes online for auto insurance policies.  Checks are in place to ensure the policy being set up is for the right person and the right vehicle.  Credit report information such as social security numbers, addresses and date of birth are used to confirm identity.  This is not a perfect science either and perpetrators can even alter credit reports if access is obtained to the credit reporting agencies.  Hopefully, over the next few years, monitoring will improve and the amount of fraud will decreased, ultimately lowering our auto insurance rates.

Written by Sara Smart

Follow me on Twitter: http://twitter.com/#!/SaraSmart55

Many states are still working under the no-fault auto insurance ruling and experts believe this is causing a crisis in the auto insurance industry.  The laws were originally put into place to stop ambulance chasing lawyers from submitting small-claims cases, and it helped car accident victims receive funds quickly instead of waiting for the determination as to who was at fault.

Unfortunately, these laws are backfiring since many believe its contributing to fraud, rising medical costs, large benefit payouts, and excessive lawsuits.  Auto insurance quotes in Florida are skyrocketing and many are blaming their no-fault laws according to “Why Does Everyone Hate No-Fault Car Insurance?” by Barbara Marquand on FoxBusiness.com.  Some insurance companies have actually limited their business in states with no-fault insurance laws since it ends up being so much more expensive for the insurer.  This ends up affecting competition and can drive up auto insurance rates.

Currently, 12 states and Puerto Rico have no-fault auto insurance laws including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.  The laws allow policyholders to collect funds for car accidents from their own insurance company regardless of who was at fault.  The laws also prevent people from suing for pain and suffering unless their injuries are a certain extreme.  Florida is the nation’s staged-accident capital and this of course drives up Florida auto insurance quotes.  Many industry experts believe no-fault auto insurance needs to be eliminated altogether or the crisis will continues and rates will keep going up.

Alabama has been one of the leaders in uninsured motorists for years according to the press release found on OnlinePRNews.com.  Alabama auto insurance leaders and state lawmakers want to change this statistic and are pushing through legislation to reduce the rate of uninsured drivers throughout the state.

Alabama state law says that residents must have a liability policy in place if they want to legally drive an auto.  They are also required to carry proof of insurance with them in the car.  Even though there is a $500 fine for first time offenders, many drivers still choose to go uninsured.  The Insurance Research Council says that about 1 in 5 drivers in Alabama were uninsured in 2009.  To discourage this stat, lawmakers are trying to put in place an electronic auto insurance verification database which would match up policies with autos registered in the state allowing officials and the Department of Revenue to quickly determine whether or not a given car is insured.

In order to register your car you must check a box confirming you carry auto insurance for the car, but this database would actually verify this information rather than taking the driver at their word.  Obviously a handful of drivers are blatantly lying about this information so something needs to be put in place to prevent this from going on.  Hopefully this type of system will encourage more drivers to keep their policy valid and choose to be truthful on their registration application.

Bristol West Insurance has a link on their page to The Coalition Against Insurance Fraud website with some useful information for consumers discussing how prevalent auto insurance fraud really is.  One particular article discusses how even minor “fudging of details” can be considered fraud and ends up costing insurers and ultimately consumers a lot of money.

Auto insurance fraud is not only committed by hardened criminals or fraud rings.  Many normal and generally honest people commit fraud through leaving out or changing minor details.  Some people feel they are owed more because of all the premiums they have paid so they tell a little white lie to get a little extra money.  They feel it’s a small amount and won’t hurt anyone.  The truth is, with so many people thinking this way, the losses to the insurance companies can really add up and at this point the costs are passed on to the customers through higher auto insurance quotes.

Ask yourself if you may have fudged the details just a bit in your favor.  Here are some questions to determine if you may be guilty of insurance fraud.  Have you ever underestimated the amount of miles you drive to work?  Have you ever said you park your car in a garage when you do not?  Have you let an auto repair shop inflate your bill to recoup your deductible?  Have you ever inflated the value of items in your car or home when filing a claim?  These are just a few examples of minor fraud violations that add up and really do end up costing everyone more money.  When you know better, you do better so, ensure you are as accurate as possible with your insurance company.

According to the article “Florida Senate Panel Advances Auto Insurance Bills” by Brent Kallestad on Business Week’s website, two Florida bills aimed at cutting down the amount of fraud running rampant through Florida moved passed an important Senate panel.  The Senate Banking and Insurance Committee barely approved the bills after some debate between lawmakers.

Legislature is trying to get a handle of the amount of auto insurance fraud that is frustrating insurers enormously.  The bills move forward after being backed by the insurance industry which would give them more power to deny claims they deem suspicious for fraud.  A similar bill is moving through the Senate as well.  Florida auto insurance quotes are impacted by the amount of fraud going through the state, so hopefully as fraud decreases so will auto insurance quotes Florida.

The bills are guaranteed to pass.  Mark Cedarberg, an Orlando lawyer, cautions lawmakers about giving the insurance companies too much freedom.  He believes that if the bills pass it will make it harder on honest people, including honest doctors who need to be paid.  Once an auto insurance company decides to deny a claim it will be challenging to get it reversed.  Insurers, medical providers, and lawyers all agree that fraud is too prevalent, but they can’t agree on the best solution to fix the problem just yet.

Auto insurance fraud is soon to become a felony in the state of New York.  Legislators are working on harsher penalties for those submitting false claims and other fraudulent activity according to the article “New York Senate Passes Bill Making Auto Insurance Fraud a Felony” found on the US Insurance Corner website.

The New York Senate is hoping that passing harsher penalties against perpetrators will not only encourage less fraud but will ultimately lower costs of auto insurance quotes for everyone in the state.  Fraud losses have to be made up somehow by insurers and unfortunately it ends up coming out of innocent, law-abiding customers.

Republican Senator James Seward sponsored the bill and on the Senate’s insurance committee as a chairman.  He believes the new legislation offers a strong deterrent to those considering fraud against their auto insurance company.  He also sees this bill improving highway safety and dropping auto insurance rates for everyone.  Depending on the history of the perpetrator and the circumstances around the fraudulent activity, a person could face a class B, C or D felony which translates to much harsher punishment.

The bill targets those who stage accidents since that is one of the more egregious acts, but this is not the most common type of fraud.  The State of New York Insurance Department says about 9 out of 10 fraud cases are related to no-fault injury claims.