The increase behind your Hialeah car insurance premium may not be from what you think.
Florida is one of the few states where you are required to carry car insurance that protects both you and the other driver. In most other states, they only require you to carry car insurance that pays for the medical bills, injuries, and damages that you cause to another person.
Florida’s unique requirements of switching that up came not from wanting to be different from other states, but from the increased amount of staged accidents and fraudulent injury claims that were designed to get money from the car insurance companies.
Now you may think that this is not your problem, but that this is the insurance company’s problem, right?
White Collar Crime against Your Hialeah Car Insurance
A white collar crime is a crime that is committed against a corporation. Many people look the other way when this type of crime is committed because they feel that it is not harming a specific person. This is the type of crime that car insurance fraud is categorized as.
Unfortunately, this way of thinking about car insurance fraud is flawed because it does hurt a specific person – YOU. Car insurance companies are in the business of making, not losing, money. And just like any other business, if they are losing profits due to one area of the business not doing well they are going to increase the price of their product to compensate for it.
Put in simpler terms, the more insurance companies pay out in fraudulent claims, the higher your Hialeah car insurance premiums will go. This is why the State of Florida claims they stepped in.
Hialeah Car Insurance Coverage
January 2013 is when it became mandatory that Florida drivers have the following car insurance coverage:
- $10,000 personal injury protection (PIP)
- $10,000 property damage liability (PDL)
The PIP is to pay for your injuries, regardless of who was at fault for the accident, and the PDL pays for the other person’s damages that you cause.
Prior to January 2013, drivers were required to carry coverage to pay for the damages to the other person’s vehicle and the injuries that the other person sustained.
Under the old required coverages, criminals were staging accidents and then would claim fake injuries or were working with medical providers that exaggerated the treatments being provided for claimed injuries. After the insurance companies paid out on the claim, everyone involved would split the money.
Did the New Hialeah Car Insurance Requirements Help?
The jury it still out on whether the change was good or not. Yes, there was a 5% decrease in PIP fraud referrals, but this isn’t earth shattering. There was also a 31% increase in arrests and a 25% increase in convictions, but these statistics could be from the state cracking down harder on this crime and not from the change in the insurance law (Florida Department of Financial Services – Division of Insurance Fraud).
Also the changes to the law didn’t stop the crime; it only changed how it was done. So now instead of staging accidents to make it look like the victim caused the accident, criminals are now hitting each other and making the fraudulent claims on their own insurance policies.
What can you do about it? You can report insurance fraud to the authorities whenever you suspect something is not right with an accident you see. You can also shop around for your Hialeah car insurance to make sure you are getting the lowest rates you can, just in case your insurance company is passing on more than a fair share of price increases from fraudulent claims.