PCI’s William Stander: PIP Fraud an Epidemic

Apr 13, 2011

The following article was published in the Miami Herald on April 13, 2011:

PIP Fraud an Epidemic

Florida ranks first in the nation in questionable auto-insurance claims, and personal-injury protection (PIP) fraud has spiraled out of control. This epidemic results in costly premiums for Florida motorists, who pay the second-highest auto-liability insurance premiums in the nation. If left unchecked, the increase in premiums related to insurance fraud, $48.64 per insured person, could reach $946 million for insured Florida drivers this year alone, according to the Insurance Information Institute.

An insured motorist claimed that he was driving from St. Petersburg to Tampa five times a week to receive therapy from a medical clinic because he felt comfortable with the provider — despite the fact that he worked all day in a different county and it took him 45 minutes to get to this clinic. There were at least 30 clinics that were closer to his home or employer. Surveillance on this man showed that he was not at the clinic on dates that were billed by the provider. He cooperated with authorities, who developed an investigation that resulted in multiple arrests.

Florida needs legislators to pass laws that target and limit swindlers and dishonest PIP lawyers and clinics that drive up such staggering insurance premiums. Specifically, we need legislators to support and expand investigations and prosecutions of insurance fraud and to authorize Examinations Under Oath (EUO) that will allow insurers to interview policyholders and providers about the alleged benefits received.

Florida’s insurance-fraud crisis is causing premiums to skyrocket, to the detriment of policyholders and the sole benefit of those committing fraud. The scams are many, but so are the solutions. Allowing an arbitration option within automobile policies, mandating crash reports to include the names and addresses of all passengers involved in a crash or accident, requiring better licensures and inspections of PIP clinics and capping lawyers’ fees in PIP litigation to a percentage of benefits obtained are among the solutions we urge the Legislature to enact and enforce.

Most important, we believe the Legislature should grant more authority and funding to Chief Financial Officer Jeff Atwater and the Department of Financial Services. This funding would help them to fully utilize their resources to prevent criminals from creating unnecessary costs for law-abiding Florida drivers.

PIP fraud plagues our state. It must be curbed before it costs consumers even more money.

William Stander, assistant vice president, Property Casualty Insurers Association of America, Tallahassee