BRADENTON -- Stiffer penalties, increased consumer protection and revisions to car crash reports are among several measures Florida lawmakers will be reviewing in an effort to fight auto insurance scams.
Rep. Jim Boyd, R-Bradenton, today will introduce the new legislation under House Bill 1411.
The bill, sponsored by Boyd, aims to bring reform to the Personal Injury Protection insurance, also known as PIP or Florida No-Fault, that has led to rampant staged accident rings.
“PIP has become a target for about $1 billion in fraud operation in a variety of ways,” Boyd said. “This is a bill that gets at curtailing the fraud.”
Typically, the fraud involves unscrupulous clinics and attorneys coordinating a staged accident. Police arrive at the scene and run a brief report. Days later, the passengers in on the scam file injury claims looking to collect from the PIP fund; sometimes even adding phantom passengers.
“It’s a very complex situation,” said Alden Weichel, president of Bradenton Insurance. “Hopefully that bill will rein that in. I don’t think you’re going to eliminate it as people will always find angles on things, but hopefully it can put a better handle on the situation.”
The mandatory PIP coverage provides $10,000 per accident for medical bills regardless of who is at fault. The insurance coverage, however, has triggered a slew of staged auto accidents as those looking to cash in on the insurance fund stage accidents and report false injuries.
Florida ranks No. 1 in the nation in auto fraud insurance, according to the Division of Insurance Fraud.
Between 2007-09, more than 3,000 staged accidents were reported in Florida from 2007-09.
“It’s a real bad problem and they’re going to have to tighten the law,” said Bob Fowinkle, president of Moore, Fowinkle, Schroer Agency in Bradenton.
HB 1411 aims to fight the issues with some of the following proposals:
n New billing practices that ensure only appropriate medical services are covered
n Civil penalties for those convicted of fraud
n Require law enforcement to list all passengers in accident reports to eliminate loophole for phantom passengers
n Stricter requirements for clinic ownership
Chief Financial Officer Jeff Atwater is expected to attend today’s news conference in which Boyd will outline the new legislation.
The state estimates PIP fraud will add about $1 billion in costs to Florida’s No Fault auto system by the end of the year. Fraud already has increased annual auto insurance premiums by an estimated $100, based on a two-car family.
“PIP fraud is one of the easiest frauds to commit,” said Andy Gregory, of Des Champs & Gregory in Bradenton.
“I trust Jim Boyd to properly review the severity with his experience in insurance and his honesty and integrity.”