Florida No-Fault closes five Tampa stores amid fraud investigation

Florida No-Fault Insurance has closed nine retail stores in Florida, including five in Tampa, amid an ongoing investigation into auto insurance fraud.

Direct General Insurance Agency Inc., the Nashville parent of Florida No-Fault and Cash Register brands, said the closings, which occurred Friday, are expected to be temporary.

Direct General said it was experiencing "extraordinary levels of losses which it believes are directly attributable to a dramatic increase in illegal insurance fraud activity."

Direct General said it was working with law enforcement and the Florida Department of Financial Services' division of insurance fraud on the investigation. DFS spokeswoman Kyra Jennings said regulators became involved after the company saw a spike in tips about personal injury protection (PIP) fraud, primarily in Hillsborough County.

Jennings said the sudden closings may have shocked customers but did not violate Florida law. Insurers have to let regulators know if they drop at least 1,000 policies or pull out of the market completely.

The shutdown, however, "was not as consumer-friendly as we would have liked," she said.

Direct General spokeswoman Courtney Ryder said the inquiry has been under way "for quite some time," but the company opted for a rather abrupt closure of its stores after it became concerned that fraud was widespread and customers were being affected.

"Many innocent people are being impacted by fraudulent behavior and the wrongs being committed here," the company said in a statement. "We don't want our customers to be among them."

The company declined to release further details.

It referred consumers with knowledge of any suspicious activities to the Department of Financial Services' toll-free insurance fraud hotline (1-800-378-0445) and its Web site ( www.MyFloridaCFO.com/fraud).

The state offers rewards up to $25,000 for information directly leading to an insurance fraud arrest and conviction.

Although the company has stopped writing new policies, it will continue to service existing customers. Customers trying to make payments at one of the closed stores are urged to call toll-free 1-877-463-4732 or go through the Web site www.directgeneral.com. Customers can pay by credit card on the site or obtain other payment and policy information, the company said.

Direct General, which caters to drivers with impaired credit, has nearly 100 retail store locations throughout Florida, employing nearly 250 auto insurance agents.

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242. Follow him on Twitter at twitter.com/JeffMHarrington.