I wrote a previous article about a large example of insurance fraud by a landscaper and said I would do more research about the topic. I came across this report by the Florida Department of Financial Services Division of Insurance Fraud Crime Intelligence Analyst Unit, which I recommend you read if interested in the topic of insurance fraud. It was stated in the report that for almost every type of insurance, that insurance fraud is on the rise. Insurance fraud increased significantly over the past year, indisputably as an impact of the down-turned economy. While there are several products of which exposure has been noted, the greatest measured impacts are as a result of vehicle insurance fraud, mortgage fraud, and workers’ compensation premium fraud. The Coalition Against Insurance Fraud reports that “hard-pressed businesses are finding ways to avoid paying full workers’ compensation premiums. Companies hide workers in shell companies to reduce their payroll…they misclassify workers in high-risk jobs as being low-risk (i.e., landscapers misclassified as clerical office employees).” An analysis of questionable claims submitted by more than 1,000 National Insurance Crime Bureau member companies in the first quarter of 2009 found that cases of workers’ compensation premium fraud increased 71% from reported incidents during the first quarter of last year.

In the report’s conclusion, it stated the following “And, last but not least, it is recommended that we focus efforts on the increase in workers’ compensation premium fraud; specifically we must work diligently to identify employers who are misclassifying workers’ to reduce costs, as well as employers who have elected to avoid payment of premiums altogether, and do so in partnership with the Division of Workers’ Compensation Compliance, not only as enforcers, but as educators, to increase awareness to minimize such instances by reinforcing the potential consequences.”

Insurance fraud is not a victimless crime! It is estimated that insurance fraud costs the US $80 billion dollars or more a year. Those costs get passed down to you, the consumer. The CAIF estimates that cost to be approximately $950 per family. The cost of workers’ compensation fraud is also very high for businesses. Reporting insurance fraud is easy and just a click away. If you are aware of any businesses or individuals that are committing insurance fraud, please report it the Florida’s Division of Insurance Fraud.

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