December 09, 2011
By: Jana Bell
A pattern of fraud and abuse linked to Florida's no-fault auto insurance system will result in a significant added cost to auto insurance policies in the state again this year.
Abuse of the system will cause approximately $658 million in added costs for the state's drivers this year, according to the Insurance Information Institute. That number is even greater than the $617 million "fraud tax" the III calculated last year.
"On a per vehicle basis that $658 million boils down to a fraud tax of nearly $58 per vehicle in Florida," said Dr. Robert Hartwig, an economist and president of the Insurance Information Institute. "Given the fraud and abuse that permeates the Florida no-fault system, it comes as no surprise that the Sunshine State is also among the costliest places to purchase auto insurance."
Since the policy was instituted in 2009, fraud related to the system has cost insurers and drivers almost $1.3 billion.
According to the most recent data from the National Association of Insurance Commissioners, Florida ranked fourth in the country in auto insurance premiums, with drivers paying an average of $1,055.
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