Car insurance fraud spiked in Florida as drivers wrecked their cars deliberately to file medical claims, according to an announcement from an industry group today.

Staged car accidents skyrocketed 58 percent in 2009 to 1,999, according to the National Insurance Crime Bureau's statement today. Tampa had the worst problem, with intentional collisions quadrupling to 487, the organization said.

"South Florida used to be the focal point of these deliberate crashes," said NICB President Joe Wehrle in a statement. "While the Miami and Hialeah areas continue to show increased activity, the criminals have expanded their operation northward and Tampa is now at the epicenter of this crime."

United States auto insurers, an organization headed by State Farm Mutual Auto Insurance Company, Allstate Corporation, and Geico are trying to find physicians who manage the largest number of claims flagged for fraud. Car insurance fraud for bodily injury coverage cost the business $4.8 billion to $6.8 billion in 2007, and the cost has risen since as far back as 2002, explained David Corum, the vice president for the Insurance Research Council.

Florida has the largest rates for personal-injury-protection and bodily-injury fraud in the NICB's review of the 12 states that permit people to receive reimbursement for collisions without evidence of fault, the bureau reported. The number of claims suspected of fraud rose 15 percent in Florida in 2009 to 7,447 compared with 2008, the group reported.

The economic crisis in Florida may exacerbate auto insurance fraud, according to the NICB. Florida has an unemployment rate of 11.7 percent as of May, compared to the national rate of 9.7 percent, and is close to the highest rate the state has seen in decades.

Florida Leads the Pack

"Florida is way out in front of the rest of the country in the number of questionable claims submitted," explained Ron Poindexter, NICB's director of operations in the southeastearn U.S. "There is a link between the downturn in the economy and the increase in all types of insurance fraud."

Nationally, reports of casualty car insurance claims from staged accidents rose 43 percent in 2009, according to a statement the NICB made in February.

Source: InsuranceRate.com

LoJack Corp., the Westwood company that specializes in finding and recovering a wide range of mobile assets including motor vehicles and construction equipment, said today that it posted a 90 percent success rate for recovering 11,382 LoJack-equipped stolen vehicles in 2009.

Citing FBI data for 2008, the most recent year for which such data were available, LoJack said that 956,846 vehicles were stolen and that 411,444 were not recovered. That works out to a recovery rate of 57 percent. That recovery rate was 67 percent in 1999, LoJack said in a press release.

A look at LoJack's 2009 data, and a car buyer might want to think twice about buying a black Honda Civic. The Civic was the top model stolen and recovered in 2009, the company said, and the favorite color for thieves last year was black. White and silver were also popular color choices.

State Attorney General Martha Coakley announced settlement agreements with Safety Insurance Company, Liberty Mutual Insurance Company and Quincy Mutual Fire Insurance Company over allegations the companies overcharged customers.

The three companies were allegedly using incorrect motorcycle values to calculate insurance premiums. Insurers are supposed to use current book values to calculate collision and comprehensive premiums but the three companies allegedly used values that were above book value.

Coakley cited an example of a 1999 Harley-Davidson Road King Classic being given a value of $20,000 each year between 2003 and 2008. The Road King Classic’s book value was actually significantly less, listing at under $12,000 in 2008.

Under the settlement agreement, the three companies will return $11.1 million to consumers, including 6% interest. Average refunds are expected to be $300 with some customers receiving thousands of dollars.

“We are pleased that Liberty, Quincy and Safety cooperated with our investigation and worked closely with our office to reach settlements that return the alleged overcharges to affected consumers,” says Coakley. “However, it remains troubling that these overcharges occurred, and these cases certainly underscore the importance of transparency in auto insurance rating.

“Both consumers and regulators need to have access to information showing how premiums are to be calculated so that consumers can be protected and are not overcharged,” Coakley says.

To qualify for a refund, customers must have bought motorcycle insurance from Safety, Liberty or Quincy with collision or comprehensive options between 2002 and the present.

The Massachusetts Motorcycle Association (MMA) is leading an effort to make sure all entitled motorcyclists receive their refunds.

“The AGO (Attorney General’s Office) has reached out to the motorcycling community, through the MMA, out of concern that the insurance companies might not be able to identify and locate the riders,” says Dave Condon, MMA chair. “All riders are encouraged to contact the MMA directly for assistance in expediting your refund.”

Massachusetts motorcyclists who believe they qualify for a refund are urged to send their contact information by email to myrefund@massmotorcycle.org, or by regular mail to MMA, Attn: MA AGO Insurance Settlement, P.O. Box 3789, Brimfield, MA 01010.

The AGO has also established telephone hotlines with the three companies: Liberty (800) 569-5411, Quincy (800) 899-1116, and Safety (877) 951-6416.

Auto insurance companies that scrutinize the occupations of their policyholders may have noticed that inner-city farming is a popular vocation. For example, it's on the rise in cities in New Jersey, Massachusetts, Connecticut, Wisconsin and Maryland. In some cases, the vehicles used for farming seem rather inappropriate -- or certainly eccentric: BMW Z3, Chevrolet Camaro, Ford Focus, Jaguar XJ6, a Porsche Carrera, Mazda RX-7, Toyota Echo.

One explanation might be government largesse and farm subsidies. But a more likely explanation is that some consumers have figured out that they can save money -- as much as 20% -- on their auto insurance premiums by claiming a 'farm use' discount.

Quality Planning Corporation, the company that verifies policyholder data for insurance companies, selected 151,022 vehicles for which a farm use discount was claimed, and then examined the garaging address of each. Geo-coding techniques were then used to calculate population density for this address. Of the sample, 11,699 vehicles (7.74 percent) were found in areas where, according to a 2000 Census Survey, absolutely nobody is engaged in agriculture.

"When we discovered that a Jaguar XJ6 was reported garaged at a five-acre farm in Brooklyn, we weren't sure who'd be more interested, the DEA or the policyholder's insurance company," said Ted Harris, manager of research and development at Quality Planning Corp. "We also found a correlation between this practice and those states where auto insurance is expensive. This sort of fraud can cost insurance companies millions of dollars each year -- and unfortunately it's honest consumers who end up subsidizing the dishonest."

How farm use discounts correlates with cost of auto insurance. States with highest incidence of Most expensive states for farm use discount abuse auto insurance  1 New Jersey 2 Massachusetts District of Columbia 3 Connecticut New York  4 Wisconsin Massachusetts 5 Maryland Louisiana 6 Georgia Florida 7 South Carolina Rhode Island 8 Tennessee Delaware 9 Virginia Connecticut 10 Ohio Michigan

A coalition of consumer groups wrote to Gov. Deval Patrick and his insurance commissioner, urging them to make sure the state's move toward a more competitive auto insurance market doesn't lead to the use of socioeconomic factors to deny consumers coverage or raise their rates.

The consumer groups are concerned that market changes being overseen by Insurance Commissioner Nonnie Burnes could lead to insurers using factors such as education levels, credit scores and home ownership to determine auto insurance premiums and coverage eligibility.

The concerns are not new: Consumer advocates have argued for several years that the state could open the door to the use of socioeconomic factors if a competitive rate-setting system is introduced.

This time, the letters sent Wednesday represented a response to Burnes' controversial decision last month to shift the state's highly regulated system to a more competitive model and her changes to the way high-risk drivers are insured.

Deirdre Cummings, a consumer advocate at the Massachusetts Public Interest Research Group, said she's worried that insurers will use socioeconomic factors in their calculations, potentially taking away the ability to choose an insurer from some good drivers.

Cummings said she's pleased that Burnes has expressed skepticism about using such factors in setting auto rates, but Cummings said she would like to see a stronger statement promising that such factors won't be used in the rate-setting process.

Cummings said the consumer groups, which include MassPIRG and nine other organizations, are also worried that the state's new plan for a residual market - a system to provide coverage for motorists who insurers don't want to cover - could lead to insurers denying coverage to many good drivers. If they wind up in the high-risk pool under the new plan, the drivers would be assigned an insurer instead of picking their own.

"Even people with good driving records can be rejected," Cummings said. "I think that will be a shock for consumers."

Kimberly Haberlin, a spokeswoman for the state Division of Insurance, responded by saying that Burnes has pledged to keep consumers' interests in mind as she oversees changes in the auto insurance market.

"The commissioner has made it very clear that she will have absolutely zero tolerance for unfair, excessive and discriminatory rates," Haberlin said in a prepared statement. "The move to managed competition will in fact strengthen her ability to lower premiums and give Massachusetts drivers more choice."

Jim Harrington, executive director of the Massachusetts Insurance Federation, said the members of his industry trade group are not opposed to Burnes' reluctance to use socioeconomic factors in rate- setting.

"We want to keep the current debate focused on transitioning carefully to competition and not have the focus shift to a debate on what's appropriate underwriting criteria and what's not," Harrington said.

The state Senate will study insurance surcharges levied on drivers convicted of speeding and other traffic offenses and submit a report when the General Assembly reconvenes in May, Senate Majority Leader Tony Rand said Wednesday.

The study, part of an overall review of auto insurance rates in North Carolina, might begin next month.

"It's obvious we've got a ... mess, and we need to do something about it," said Rand, a Fayetteville Democrat.

Under state law, the insurance industry levies three-year surcharges that range from 25 percent for repeated minor speeding violations up to 340 percent for driving while impaired and other serious offenses.

At speeds of more than 80 mph, the insurance penalty is severe: 80 percent for three years for a conviction of, for example, 81 in 70 mph zone.

The surcharges have driven people to look for a way out when they are charged with speeding, court officials have said. During the last 20 years, the General Assembly has obliged speeders by creating several loopholes. The result: Relatively few people are convicted as charged, allowing the rest to avoid insurance penalties, The News & Observer reported in a recent series, "Speed Unlimited."

Prosecutors, for example, have been able to let drivers plead multiple times to having a broken speedometer -- even though nothing is wrong with their speedometers.

Legislators plugged one hole last week, passing a bill saying drivers charged with speeding more than 25 mph over the limit were ineligible for a plea to improper equipment -- speedometer or a prayer for judgment continued, a break almost as good as a dismissal. They also required the state Division of Motor Vehicles to begin recording most improper equipment pleas, so prosecutors who require defendants to bring their driving record to court can spot chronic speeders.

A study bill that authorized dozens of initiatives, including the insurance study, was approved by the Senate but failed in the House last week because of differences in what the two bodies wanted to do.

Rand said, however, that the Senate would go ahead with the review of auto insurance rates. He said he would invite representatives of the insurance industry, DMV and the state Department of Insurance to participate.

Today, GMAC Insurance announced the company will reduce its auto insurance rates in South Carolina, effective immediately. Drivers in the Palmetto State can expect to save an average of seven percent when purchasing GMAC Insurance coverage from 192 South Carolina-based independent agencies.

With fuel prices surging, these rate decreases will help customers manage their transportation costs, giving them a much-needed break. What's more, GMAC Insurance's exclusive GM Loyalty Discount has increased, which means policies with only GM vehicles now get up to 5% off liability coverage.

"With lower claims costs and favorable market conditions, we have reduced the rates that our independent agents offer," said Scott Murphy, vice president of product and pricing, GMAC Insurance -- Personal Lines. "Given our long-term commitment to our customers and agents in South Carolina, we believe this is the right thing to do for both new and existing customers. And, we'll still take care of them with the same great benefits, such as our outstanding 24/7 claims service, emergency expense allowance, SmartParts guarantee and SmartReplacement program."

The GMAC Insurance rate reduction is a statewide average that will affect individual customers differently. Overall premium changes for individual motorists will vary depending on factors such as the coverages they carry, the discounts for which they qualify, where they live, the kind of car insured, who drives it and how much it is driven.

"We know that many customers prefer to buy their auto insurance with the help of an independent agent, so we want to allow our agents to provide the best possible value to their customers," said Murphy. "With our statewide rate decrease, South Carolina customers will be able to get great rates and great coverage with one of the top insurers in the nation."

For more information about GMAC Insurance coverage and to find a local independent agent, call 877-468-3466 or go to gmacinsurance.com.

The GMAC Insurance Group is one of the largest automobile insurers in the United States and is a wholly owned subsidiary of GMAC Financial Services. GMAC Insurance Personal Lines offers a variety of property and casualty products, including personal auto, RV, motorcycle, boat and commercial auto insurance. With a nationwide network of claims professionals, local independent agents and a 24-hour, toll-free claims hotline available 365 days a year, GMAC Insurance provides superior claims service for its customers.