Auto insurance fraud continues to soar in Florida over an epidemic of staged vehicle accidents, fake injuries, needless medical treatment and questionable claims. Sunshine State drivers pay the bill, which will amount to an estimated $658 million this year in higher premiums, according to the Insurance Information Institute. That figure is a whopping 122 percent higher than just two years ago.
This issue has finally gained the attention it deserves, with political leaders and business organizations coming out in support of tough anti-fraud legislation. Gov. Rick Scott, Chief Financial Officer Jeff Atwater, the Florida Chamber of Commerce, Associated Industries of Florida and the insurance industry are all clamoring for reform of the state’s Personal Injury Protection law, known as PIP and no-fault insurance.
Two Manatee County legislators, Sen. Mike Bennett and Rep. Jim Boyd, have filed similar bills cracking down on PIP fraud. The Legislature missed an opportunity for reform last session when Boyd’s first attempt failed to gain traction. This year should be different as the stakes continue to rise.
Florida holds the ignominious reputation as the worst state for questionable claims from staged accidents, according to statistics from the National Insurance Crime Bureau. Tampa, formerly the worst city in the nation, fell to No. 2 behind New York City but right ahead of Miami and Orlando.
Florida is one of 12 states with no-fault laws. Staged accidents are more prevalent in these states. Florida requires registered drivers to carry this insurance, which provides a maximum of $10,000 in medical care from injuries suffered in vehicle crashes regardless of which driver is at fault in the collision.
The reasons for PIP remain sound -- so accident victims can secure payment for treatment quickly from their own insurer without worry of financial loss. That also is designed to reduce the need for accident victims to sue.
In staged accidents, the phony victim vehicle contains passengers who qualify for medical claims against the driver’s car insurer -- including certain household members and others. At $10,000 per “injured victim,” the overall cost rises quickly. Crime rings operate many of these scams, which often involve unscrupulous physicians and lawyers eager to grab a share of the fraud.
The Personal Insurance Federation of Florida reports that more than 50,000 PIP lawsuits were filed in 2010. The high attorney’s fees awarded to plaintiff’s lawyers force insurance companies to approve questionable claims to avoid even more expensive litigation.
Among many provisions, Boyd’s bill caps attorney’s fees and some medical services, and requires clinics to register with the state under certain circumstances -- all desirable reforms.
Lawmakers and reform supporters will have to fend off powerful trial attorneys and medical providers to adopt vital reforms. Floridians should push hard for change.
Consumers are paying a steep and growing price for the state’s broken no-fault insurance system. The Insurance Information Institute has estimated Florida residents paid a “fraud tax” of about $50 per vehicle in 2010. That amount could jump to $84 this year.
Plus, according to the National Association of Insurance Commissioners, Florida’s drivers pay the highest auto liability insurance premiums in the country -- an astounding 56 percent more than other consumers. Annual premiums average $736 in Florida but only $471 across the nation.
Floridians are literally getting robbed. PIP must be reformed.
