A recent report was just released by the National Insurance Crime Burea that proved that Florida auto insurance claims fraud grew more than 30 percent since 2008. That is a very large increase of insurance fraud and will have to be addressed very quickly to keep rates under control.

The statistics will show over 8,000 suspicious claims last year in 2010, which is up from just over 7,000 in 2009 and close to 6,000 in 2008.

Nearly 90 percent of the fraudulent claims were based personal auto insurance and insurers’ top reasons included faked or exaggerated injuries, fake accidents and overly excessive treatments. The rest, in order from most to least, were for items like commercial auto insurance, homeowners insurance, commercial general liability insurance and Florida workers compensation.

A current Bill is being offerd to help decrease Florida auto insurance fraud and staged accidents, HB 967 and SB 1411, and is coming to the end of the legislative process. A very important property insurance package, SB 408, that aims in part to target fraudulent and inflated homeowners claims, including those for all of the damage that is caused by sinkholes, has moved through three committees. What do Floridians think about this new legistlation?

Jacksonville, Florida — Make sure that you have the proper GAP insurance coverage for your auto policy in Florida. This Guaranteed Auto Protection insurance is an optional type of insurance policy that offers protection against financial liability for people who have bought a vehicle on loan and the actual cash value (ACV) or the market value of the vehicle is less than the amount owed on the loan.

Based on the auto insurance policy, GAP insurance normally provides coverage against thefts and accidents. However, the terms of the insurance policies vary and so, it’s better to carefully evaluate the terms and conditions of the GAP insurance policy before purchasing one.

• How does GAP insurance works?

To get an idea of how GAP insurance works, consider the following situation:

Suppose you purchase a new vehicle on loan for $22,000. You make the down payment of $600 and agree to pay $300 as monthly installment. Now, six months later, the value of your car decreases to just $16,000. After six months, you’d have paid $2,400 (six monthly installments in addition to the down payment). You still owe 19,600 on the car. At this time, your vehicle meets an accident. In such a case, your insurance company will pay you just $16,000 and not $19,600. Now, if you don’t have a GAP insurance, the additional $3,600 would come out of your pocket.