Opinion: Florida needs protection from Personal Injury Protection fraud

Sep 30, 2011

The following article was published in the South Florida Sun Sentinel on September 30, 2011:

Florida needs protection from PIP fraud

By Charles J. Grimsley

The recent meeting of the Florida Cabinet brought the bright light of truth to a huge financial burden on Florida drivers: the uncontrolled rise in expenses for personal injury protection automobile insurance. PIP-related payments and lawsuits have skyrocketed 70 percent in just the past three years, even as the number of Florida drivers and accidents have not changed.

As a result, every Florida driver is paying an average $500 annual penalty for PIP fraud and abuse. Gov. Rick Scott characterized PIP fraud as an $800 million tax on Florida consumers. There have been huge increases in PIP premiums during the past few years, yet insurers still pay $1.40 for every dollar they receive, resulting in huge losses for this coverage. The resultant fraud-driven rate increases needed to cover those losses directly hit consumers’ pocketbooks, while the fraud-perpetrators get rich.

Without significant legislative reforms, insurers will be forced by organized fraudsters to raise legally mandated PIP premiums.

The Legislature needs to reform PIP laws and regulations to force fraud perpetrators out of our state. Florida has the highest number of questionable claims of any state in the nation, according to the National Insurance Crime Bureau. That won’t change until there is strong, swift action.

The Legislature considered several bills that would reform PIP laws in the last session. Under intense pressure from trial lawyers and the medical community, none was passed into law. Those proposals deserve reconsideration in the next legislative session.

We support significant PIP law reform and increased budgets for law enforcement officers who investigate PIP fraud. Without better laws and enforcement, PIP fraud will continue to grow as an economic and criminal problem, to the detriment of all Floridians.

Charles J. Grimsley is chairman and president of the Florida Property & Casualty Association.

Find this article here:  http://www.sun-sentinel.com/news/opinion/fl-forum-pip-insurance-0930-20110930,0,3622824.story