Florida Must Stop Auto Insurance Fraud

[FayeforCure]

Not only do staged accidents cost us all, but so do opportunistic injury claims in non-staged accidents up everybody's insurance premiums.


Florida must stop auto insurance fraud


Posted: February 17, 2012 - 12:01am  |  Updated: February 17, 2012 - 8:26am

By The Times-Union


Floridians are paying an annual “fraud tax” of about $115 for a typical two-car family that is generated by unwarranted personal injury protection claims under the state’s no-fault auto insurance program.

As part of the no-fault law enacted in the early 1970s, the PIP requirement was designed to pay up to $10,000 for timely emergency treatment for injured motorists.

But what has evolved includes staged accidents organized by fraudsters who conspire with cooperating clinics, physicians, chiropractors, massage therapists and unscrupulous lawyers to bleed the system with needless treatments and spurious lawsuits.

The fraud-related costs totaled $1.3 billion between 2009 and 2011, according to estimates by the Insurance Information Institute.

The numbers are startling:

- Lawsuits have increased from 9 per 100 crashes in 2008 to 39 per 100 crashes in 2011.

- Since 2007, the average paid PIP loss per car has increased by 44 percent.

- Staged accidents increased from 1,268 in 2008 to 2,779 in 2010, an increase of 119 percent.

Florida leads the nation in the number of questionable PIP claims, twice as many as the next highest state.

With an average premium of $1,055 for auto insurance, Florida is now the third-most expensive state, having recently surpassed New York, according to industry reports. It could easily become the most expensive in the country unless something is done to address PIP fraud.

Both the number and the severity of PIP claims continue to increase. The average cost per claim is now $8,600, which is 48 percent higher than just three years ago.

The results are predictable: While the number of auto accidents has declined in the last three years, total insurance payouts for PIP benefits are up 69 percent, increasing from $1.45 billion in 2008 to $2.45 billion in 2010.

Insurance rates are skyrocketing, becoming unaffordable for many and leaving more and more uninsured motorists on state highways.

Hillsborough shows the way
It is shameful that the Legislature has not dealt with this problem, but one county has demonstrated how effective reform can be.

After the Legislature failed to address PIP fraud last year, officials in Hillsborough County passed an ordinance requiring so-called PIP clinics to register and be monitored, and set up a local law enforcement task force to address fraud.

The result was a 62 percent drop in staged accidents from 2010 to 2011. Within a month of the ordinance’s passage, 79 clinics closed.

The number of questionable insurance claims in the county dropped to nearly zero.

Coming this way
Auto insurance fraud is most dominant in South and Central Florida, but PIP fraud activity, including staged accidents, has picked up substantially in Northeast Florida, according to state insurance officials.

The Jacksonville Field Office of the state Division of Insurance Fraud, which has five detectives, is now investigating several area PIP clinics as well as handling fraud case referrals, which increased by more than 40 percent in the last year.


Read more at Jacksonville.com: http://jacksonville.com/opinion/editorials/2012-02-17/story/florida-must-stop-auto-insurance-fraud#ixzz1mgYe2tCT

[Tacachale]

Yeah, the personal injury industry is pretty damn ridiculous.

[ChriswUfGator]

The increase in PIP payments only tracks the increase in the cost of healthcare generally. But it's more fun to blame the lawyers.

FWIW, the providers are the offenders here. $10 for an aspirin, $20 per pair of latex gloves, and on and on. The literal worst of which are owned by or affiliated with Rick Scott, so I wouldn't expect anything to change anytime soon,

[FayeforCure]

The increase in PIP payments only tracks the increase in the cost of healthcare generally. But it's more fun to blame the lawyers.

FWIW, the providers are the offenders here. $10 for an aspirin, $20 per pair of latex gloves, and on and on. The literal worst of which are owned by or affiliated with Rick Scott, so I wouldn't expect anything to change anytime soon,

Then there are the so-called injured that are trying to cash in on fake injuries.

[mtraininjax]

Insurance rates are skyrocketing, becoming unaffordable for many and leaving more and more uninsured motorists on state highways.

Skyrocketing? More so than the price of gas which is estimated to be at $4.25 by April? Maybe we see $5 a gallon this summer. How about making oil and election year issue? Doubtful insurance will be an issue though, unless that is Healthcare Insurance, which is going to be really hot this summer.

Of course idiots putting on makeup, texting, or any other distracting activities will cause more accidents, staged or not.

[ChriswUfGator]

The increase in PIP payments only tracks the increase in the cost of healthcare generally. But it's more fun to blame the lawyers.

FWIW, the providers are the offenders here. $10 for an aspirin, $20 per pair of latex gloves, and on and on. The literal worst of which are owned by or affiliated with Rick Scott, so I wouldn't expect anything to change anytime soon,

Then there are the so-called injured that are trying to cash in on fake injuries.

That's a minuscule amount of the problem, like saying that because 1% test positive in Rick Scott's welfare drug testing program it justifies the additional bar to benefits for the other 99%. The accidents are normally very real. I'm telling you, if you get into the figures, the increase in PIP payments only tracks the increase in the cost of healthcare generally. Which is to say, astronomical.

The problem is the auto insurance companies aren't generally health insurers, they see a 100%+ increase in PIP payments and attribute their own reasons for it. The auto carriers by and large generally treat policyholders like criminals anyway, their view certainly falls within their normal worldview. But it's not reality. Go to the emergency room for anything these days and it's a grand by the time you're through. Columbia HCA (stock in which is the primary source of our governor's personal wealth) is one the worst offenders, don't expect anything to change anytime soon.

[Tacachale]

^I agree that there's a lot more to the increase healthcare costs than this. But insurance fraud does contribute to the problem of rising auto insurance premiums. Even the trial lawyers' association acknowledges that and is behind a bill to confront the problem (though obviously they support the version that would affects trial lawyers the least).

http://www.tampabay.com/news/business/senate-pip-reforms-get-warm-reception/1213698

[ChriswUfGator]

^I agree that there's a lot more to the increase healthcare costs than this. But insurance fraud does contribute to the problem of rising auto insurance premiums. Even the trial lawyers' association acknowledges that and is behind a bill to confront the problem (though obviously they support the version that would affects trial lawyers the least).

http://www.tampabay.com/news/business/senate-pip-reforms-get-warm-reception/1213698

Well why wouldn't we support it? PIP pays the medical providers, not us. If someone gouges people for $10 per aspirin and $20/pair for latex gloves, or accupuncture, or whatever other harebrained fad comes along to bill the insurance company for, all of that occurs directly between the carrier and the medical providers, lawyers have literally nothing to do with it. If somebody gets in a wreck and goes to the hospital, then doctor bills the PIP carrier whatever he bills it. The auto carriers are just bitching because PIP claims are getting more expensive, but the reality is that it's only tracking the larger increase in the cost of healthcare generally.

Fraud is probably representative of some small percentage of the total number of claims, this is just the latest version of the mythical 'welfare queen' argument, the insurance companies stirring up some image of the state being awash in fraud. And the ones who do engage in PIP fraud, and there aren't really that many in the larger picture of things, are doctors. That's all PIP pays for is medical care. That's all it does.

[Dog Walker]

What do lawyers have to do with PIP coverage?  I thought the whole purpose of PIP was to get the lawyers out of the smaller injuries and unclog the courts.  Am I remembering wrong?

[Non-RedNeck Westsider]

It seems fairly simple to me.  If the max-payout on a PIP claim is $10k, then the docs are going to bill the full amount in whatever way they can - extra procedures, addtional referrals, specialists, etc...  If the max-payout is $20k, they would be sure to double check everything - you want to be sure to do your due diligence. 

I suppose if the PIP was lowered to $5k, then the insured would still get the same treatment, but aspirin would only cost $5 each.