Statistics showing rising claims and fraud are an argument for allowing Florida's no-fault auto insurance law to expire as scheduled in 2007, a trade group said.

The National Association of Mutual Insurance Companies noted two recent studies by the Insurance Research Council and the National Insurance Crime Bureau as evidence of the problems with the Florida law, which it says show that claims costs are rising in the state along with the number of fraudulent activities.

The IRC earlier this month found that the average personal injury protection claims costs under the no-fault law rose 18 percent over a three-year period, reaching just under $10,000 in 2005.

During the same time period, standard inflation was only half that rate, and the inflation for overall medical costs was only 13 percent.

Additionally, the IRC study found that, despite the increased costs, the injuries claimed under the Florida law have grown less severe in recent years. In 2005, 71 percent of claimants had no disability as a result of their accidents, compared with 67 percent in 2002 and 66 percent in 1997.

Utilization of medical providers increased, with the total amount per claimant charged by chiropractors increasing by 35 percent over the three-year period, from $4,837 to $6,510.

The NICB report, released last week, listed Miami as number one in the country for staged accidents.

“These two reports, taken collectively, should make Florida lawmakers realize the current no-fault law in Florida isn't working, and any reforms to fix the system are not likely to be substantive,” said David Reddick, senior state affairs manager for NAMIC.

Among the bills affecting the no-fault system before the Florida Legislature is Senate Bill 2114, which Mr. Reddick criticized for simply extending the expiration date on the law in an effort to give earlier reforms a chance to work.

“The Florida no-fault law has been in place 35 years and has been amended no less than a dozen times,” he said. “That fact alone should make lawmakers realize that the law hasn't worked and needs to be allowed to sunset.”

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NAMIC Urges End To Florida No Fault

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