Auto Insurance Fraud Bills Advance in Florida Senate

Apr 12, 2011

The following article was published in the Miami Herald on April 12, 2011:

Auto Insurance Fraud Bills Advance in the Florida Senate

By Janet Zink

TALLAHASSEE — Two bills designed to fight auto insurance fraud made it through a Senate committee Tuesday, but not before facing criticism as handouts to insurers.

The Banking and Insurance Committee voted 7-4 in favor of SB 1930, sponsored by Sen. Ellyn Bogdanoff, R-Fort Lauderdale, with Sen. Mike Fasano, R-New Port Richey, joining Democrats in opposing it. Among other things, the bill would give insurers 90 days to investigate claims to make sure they’re legitimate before making payments for medical services.

That doesn’t sit well with Sen. Joe Negron, R-Stuart, who deemed the provision “ridiculous” and said it would have to change for the bill to continue to win his support.

“Let’s not use fraud as a rationale for all these other parting gifts, such as allowing three months to pay a bill,” Negron said. “Let’s not go to the other extreme and act like every person involved in an auto accident is a potential crook. People are involved in auto accidents and do have injuries.”

Florida requires all drivers to carry personal injury protection insurance that typically covers up to $10,000 worth of medical bills. Chief Financial Officer Jeff Atwater and insurers say the policies invite staged automobile accidents, unnecessary medical treatment and frivolous claims filed by people hoping to cash in on those policies. Backers of PIP reform say fraud is driving up the costs for all policyholders by about $80 a year per vehicle.

On Monday, Florida’s Office of Insurance Regulation released a report showing that PIP claims filings increased 28 percent from 2006 to 2010. The report also showed that the number of PIP-related lawsuits in which the insurer was the defendant increased by 387 percent in the same four-year period.

“I almost believe there’s no sincere effort to fix this,” Bogdanoff told colleagues, saying she would be happy to adjust her bill to address concerns. “Everybody likes this system. It’s a huge spigot that nobody wants to turn off,” she said.

She pressed panel members to tackle the issue.

“We need to stop kidding ourselves. There’s a tremendous amount of fraud in the system,” she said. “For every example that the (medical) provider or an attorney can give on the plaintiffs’ side about how a claim wasn’t paid, the insurance companies can tell you how miraculous it is that everyone’s injured to the point of $9,999. We know the system is being worked.”

Sen. Garrett Richter, R-Naples, also endured attacks on a bill he’s sponsoring, SB 1694, which seeks to limit fees for attorneys in claimants in PIP lawsuits.

Opponents said the limit would discourage people from going after insurance companies that deny claims.

“You know what litigation represents? It represents the rights of Floridians, business and individuals being handled in a system where everyone has their day in court,” Negron said.

Negron voted with Fasano and Democrats in opposing the bill, which narrowly passed by a vote of 6-5. Similar bills are moving through House committees.