PCI: Fla. No-Fault Fraud Growing; Costs Are Worse Than Other States

NU Online News Service, Oct. 28, 3:20 p.m. EDT

The Sunshine State’s system for no-fault automobile insurance is flawed to the point of systemic abuses, and fraudulent claims are climbing to higher levels than ever, to hear one national association tell it.

The Property Casualty Insurers Association of America (PCI) on Thursday released a special report on Florida’s no-fault auto insurance, stating that false claims have cost the state’s drivers more than $800 million. “Regrettably, the Florida no-fault system is completely broken,” Paul Blume, PCI’s senior vice president, state government relations, says in a statement. “Florida’s no fault system is rife with fraud and fraud costs are far worse here, particularly in Florida counties, than in any other no-fault state.”

Quoting statistics from the National Insurance Crime Bureau, PCI’s report says Florida led the U.S. in staged motor vehicle accident “questionable claims” between 2007 and 2009. What’s more, it says, four out of the 10 U.S. cities with the highest rate of questionable auto claims are in Florida: Tampa, Miami, Orlando and Hialeah.

PCI also references the Florida Office of Insurance Regulation’s Report on Review of the 2011 Personal Injury Protection Data Call, which finds that while Florida is seeing a decreasing number of drivers, crashes and injuries, the number of personal injury protection (PIP) claims that were opened in Florida between 2008 and 2010 rose by 35.7 percent.

Titled “Florida’s Automobile No Fault Insurance: A System Under Siege by Fraud and Abuse,” PCI’s report, citing data from the National Association of Insurance Commissioners, states that Florida drivers currently pay the highest auto-liability insurance premiums in America, 56 percent more than consumers in other states (annual premiums of $736 in Florida versus $471 elsewhere in the U.S.)

In order to address these issues, PCI offers a four-point plan of:

• Allowing a reasonable amount of time to investigate suspicious claims.
• Eliminating incentives for frivolous no-fault lawsuits by placing caps on attorney fees.
• Providing greater oversight of medical clinics by allowing private on-site inspections of premises to ensure the services are real.
• Preventing fraudulent, unnecessary medical treatment by establishing reasonable treatment limits.

“By passing legislation in the upcoming 2012 Legislative Session that includes these four vital components, the Legislature will help close the loopholes that prevent regulators and the marketplace from investigating and fighting fraud,” Blume adds. 

Download the full report here.