Florida Auto Insurance “Fraud Tax” Requested By Trade Group

Saturday’s Post 11/5/11-   A report from the Property Casualty Insurers Association of America (PCI) highlights issues with the Car Insurance personal injury protection (PIP) coverage offered in Florida with its no-fault auto insurance legislation.  They recommend four law changes to combat this.

  • Increased time to investigate suspect claims.
  • Inspection of medical facilities that bill for services.
  • Enforcing reasonable limits on treatment.
  • Restriction of fees attorneys can charge claimants.

Data from the Florida Office on Insurance Regulation found the average auto liability paid by Florida drivers is $265 higher than the rest of the country.  The frequency of Florida‘s claim rate increased by 19.2% compared with 1% in states with a tort law arrangement since 2006.  Within that time PIP lawsuits increased from 6,000 to exceed 28,000.  The cost of these claims outpaced health care rises by 24.7%.

Florida leads the nation in suspect claims from faked accidents. Four major Florida cities Orlando, Tampa, Hialeah and Miami are in the top 10 nationwide for this.  Florida ensures all drivers maintain $10,000 of PIP insurance.   Florida State Laws ensures 80% of all Personal InjuryPayment claims are paid.  This has resulted in Florida authorities realizing staged accidents are widespread turning the PIP laws into a criminal enterprise.

Typically auto insurance fraud claims involve a sophisticated gang whom stage auto accidents with knowing passengers. Unfortunately the auto insurance fraud does not stop there. Corrupt attorneys and medical facilities for tests and expensive treatments help to generate claims in excess of $10,000.  Increasingly, true accidents are also being exploited by its real victims being directed to the same  dishonest lawyers and medical providers. Paul Blume of PCI responsible for state government relations urges that PIP legislation be transformed in 2012 to cut criminal activity and protect Florida consumers from increased “fraud tax”.  A previous change in the legislation affecting this in 2007 resulted in it being repealed because of concerns raised by medical professionals and trial lawyers.  Another attempt this year failed due to lack of support to proceed. Republican Gov. Rick Scott intends to continue the battle to change the legislation next year.  He intends to make PIP coverage optional and has support for the reform not only from insurers but also the Florida Chamber and other business groups.