Editor's Note: In this article, Christopher Tidballlexpounds upon some key points in his latest "Blocking & Tackling" blog post.

The problem with the recent "fix" to the Florida no-faultstatute is that it does not address the root cause of the problems,which run quite deep. As the legislature dove into auto insuranceno-fault during its recent session, the focus was on personalinjury protection (PIP) being the crux of the problem.

While this coverage played a role, consider that stagedaccidents in California, which is not a no fault state,significantly predate the rise of such sham accidents in theSunshine State. The difference between the two states is that PIPmade it easier and faster to cash in.

Setting the Stage

My insurance career began in California, as an auto claims fieldadjuster in south central Los Angeles, then the nation's epicenterfor staged accidents. The scams were simple, involving an "insured"striking a vehicle with several occupants whose claims werebrokered by a "capper" to unscrupulous attorneys. Medical billswere then driven up, with demands presented. The entire processtook somewhere between three and six months.

In Florida, the game became much easier. No fault afforded aninstant opportunity to present for treatment and run up medicalbills with a $10,000 dollar blank check divvied up amongst thedoctor, lawyer, and capper with the scraps going to the pawns, or"accident victims".    Complicatingmatters for insurers is the "no fault" tort threshold that shouldhave precluded payments for pain and suffering.  But inits current watered down state, it is as worthless as the paperupon which it is written. 

What the legislature failed to do in their quest to solve thestaged accident epidemic is forsake true insurance reform for PIPreform, which will not work.

Certainly there are things that can be done to rein in out ofcontrol PIP costs, and this new law applies a band-aid in the formof a time parameter for which treatment must be obtained from adefined type of provider. Of course, unscrupulous providers willhave no qualms about changing dates of service, just as medicaldocuments from unethical providers have historically been alteredto suit the needs of unscrupulous attorneys and claimants.

When the legislature took up insurance reform, the hope was thatit would be true reform of both tort and no fault statutes. When itcomes to auto, both are interrelated and for those who have neverhandled auto claims, as may be the case with many lawmakers,sometimes hard to truly comprehend.

Looks Can Be Deceiving

From a historical perspective, no-fault looked good on paper.When a party is hurt in an accident, they go after their owncoverage instead of fighting with another's insurance company. Theunderlying premise was that costs would go down as the result ofdecreased litigation. Such was not the case in Florida, no other"no fault" states.

The first thing to recognize that that most states mandating PIPcoverage are not truly "no fault." The lone exception is Michigan,which provides this coverage with a strong prohibition againstthird-party litigation. Other states, including Florida, haveso-called thresholds that are so watered down they may as well noteven exist.

As a result, PIP coverage has become very costly while neverachieving its goal of reduced bodily injury litigation. This facthas led several states including Georgia, Connecticut and Coloradoto abolish this mandate.

Another state, Pennsylvania, gives customers the choice ofpurchasing auto no-fault or having the right to sue.

Ain't No Sunshine

The escalating cost of insurance in Florida has many facets,with arguably the biggest challenges being fraud. According to theInsurance Information Institute (I.I.I.), the "fraud tax" levied onFlorida drivers was $549 million in 2010 and was expected to doublein 2011. This fraud comes in all shapes and sizes from stagedaccidents to burying deductibles to claiming injuries that arenothing more than pre-existing conditions. Holistically, thesescams involve much more than singular line coverage, such asPIP.

Florida has also become a national hotbed for staged accidents.PIP costs associated with staged accidents increased 77 percentfrom 2009 to 2010, while billings for services not renderedincreased 32 percent, according to I.I.I. estimates. Again, thepropensity for staged accidents in the Sunshine State is not theresult of PIP, but rather because of a holistically broken systemof which PIP is a part. The failure to recognize this by thelegislature is precisely why its "fixes" consistently fail to solvethe problem.

It is important to recognize that Florida is just one of 13states to mandate no-fault coverage, yet all states see stagedaccidents or other forms of fraud. California is a tort state withno PIP coverage and consistently ranks among the leaders in stagedaccidents.

While the legislature made another attempt to fix the problem,its solution once again shows that they may not truly understandwhat the problem really is, or perhaps they are relying from adviceof lobbyists who don't want solutions to adversely impact theirspecial interests.

In case you were wondering, here are my thoughts on ways to fixFlorida's broken system:

1) Eliminate PIP. While this createsits own new set of challenges, it is one less coverage that willultimately save consumers money.

2) Keep PIP but strictly enforce the tortthreshold with language modeled after Michigan, which willeliminate the frivolous soft tissue cases clogging our courts.

3) Modify the negligence law so thatparties more than 50 percent at fault for a loss are barred fromrecovering damages.

4) Bar uninsured motorists from recovery ofnon-economic damages, a solution effectively implementedin a number of states.

5) Cap attorneyfees.

6) Cap tort damages.

7) Allow "bad faith" only in therare situations in which an insurer truly does nothonor their fiduciary duties.

8) Allow a reasonable amount of time toinvestigate suspicious claims.

9) Give law enforcement the teeth necessary topursue fraudsters while holding insurers harmless duringtheir investigations.

10) Enact caps associated with Medicare andworkers' compensation, on treatment for soft tissueinjuries, which comprise the vast majority of cases clogging ourcourts.

While we don't know what—if any—impact this new law will havetwo things are certain: First, staged accidents will continue at analarming rate. Second, consumers will see no reduction in theirauto insurance premiums. Just as every prior attempt to "fix"Florida's broken system has failed, the language of this latestiteration also lacks a true solution.