Florida Trying to Cut Back on Insurance Fraud

Florida lawmakers will take on personal injury protection insurance fraud this year and Gov. Rick Scott thinks they can fix a system where fraud causes $1 billion in increased premiums every year, according to the Tampa Bay Times.

Florida law requires a driver to carry a minimum of $10,000 in personal injury protection. It has been widely reported that Florida leads the nation in fraudulent insurance claims in part because of Florida’s no-fault law.

A new group called Gear Up Florida hopes to help push lawmakers to crack down on insurance fraud. That group believes higher insurance costs put an undue burden on businesses that rely on fleet vehicles.

“Florida’s most honest consumers are paying the price resulting from staged accidents, out-of-control litigation and unscrupulous personal injury protection (PIP) clinics that foist often unnecessary services on PIP claimants,” said Donovan Brown, counsel and regional manager of State Government Relations Property Casualty Insurers Association of America. “We must protect consumers and eliminate the rampant PIP fraud that is driving up the cost of insurance premiums in our state, and we believe sound policy containing these elements can do just that.”

Gear Up Florida is pushing for four reforms:
1. Extend the 30-day window in which insurance companies can investigate a claim they think are suspicious
2. Cap attorney’s fees to discourage frivolous lawsuits
3. Require tighter accountability out of the medical community that sees personal injury protection cases
4. Regulate alternative medical practitioners like chiropractors, massage therapists and acupuncturists

The group outlines how PIP fraud is an organized crime in Florida. The Florida Sheriff’s Association’s undercover investigators have found that people who stage accidents often are part of large networks.

Florida’s insurance premiums are more than 50 percent higher than other no-fault states, according to a Naples News article on Gear Up Florida.

Lawmakers are looking at a variety of proposals that could cut down on fraud, according to the Tampa Bay Times. Some lawmakers are pushing for more fraud investigators to crack down on staged accidents. Other lawmakers have said the PIP system is unfixable and needs to be completely abolished.

Florida’s CFO Jeff Atwater also is pushing for the PIP overhaul to be a priority in the 2012 legislative session. Atwater commissioned a group to study the issue in the summer of 2011 to provide insight and recommendations. The group found that the number of drivers in the state has remained the same and the number of car wrecks has actually gone down, but insurance costs have ballooned.

Vincent Payne is with Florida auto insurance company and Florida car insurance company, AGIC. To get a quote or learn more visit www.agicinsurance.com.

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