Florida lawmakers will consider reforms in 2012 to state insurance regulations that could cut back on fraudulent claims that make the Sunshine State one of the most expensive places in the country to insure an automobile.
It is widely speculated that fraud rings exist in Florida that stage accidents to take advantage of the state’s no-fault insurance system that requires drivers to carry $10,000 in personal injury protection.
Florida is No. 1 in the country in questionable claims linked to staged accidents, according to the National Insurance Crime Bureau.
The Florida Office of Insurance Regulation reports that auto insurance fraud costs small businesses and consumers about $1 billion annually. Insurance fraud and the resultant high rates can be especially tough on small businesses that have fleet vehicles and multiple drivers.
The Florida Chamber of Commerce has taken up the issue as an important part of the group’s lobbying efforts for 2012. The Tallahassee Democrat reports that the Chamber has a history of pushing for and getting needed insurance reforms. About 10 years ago, the Chamber’s advocacy efforts helped secure legislative changes to the workers’ compensation insurance rules.
The challenge for the governor and the legislature is to cut down on the fraud without a complete overhaul of the system. Florida’s no-fault auto insurance system was started in 1972, according to Florida Today. It came to be as a way to combat frivolous lawsuits and help people pay their medical bills more quickly after an accident.
Someone legitimately injured in an automobile accident would go through the $10,000 in personal injury protection quickly with only a ride in the ambulance and a trip to the emergency room. Reform advocates claim that lightly injured wreck victims are used by fraud agents to take the $10,000 from the insurance company and sometimes the wreck victims even get a cut of the cash.
State Chief Financial Officer Jeff Atwater has been blunt about what he sees going on in Florida. “Honest consumers are footing the bill for fake procedures at fake clinics,” he said in Florida Today.
The business reform advocates want to see a few significant changes to the law. They hope to give insurance companies more time than the current 30 days to investigate claims they suspect might be fraud. They want to cap lawyer’s fees and they want insurance companies to be able to inspect the medical clinics some think are committing the fraud.