A Florida House committee will begin discussions Wednesday to answer the call for reform of personal injury protection auto insurance by Gov. Rick Scott and Chief Financial Officer Jeff Atwater.
Atwater said organized crime and huckster legal services have driven up personal injury premiums by $910 million through staged accidents.
Instead of junking coverage designed to reduce insurance costs by avoiding litigation over minor injuries in crashes, Scott said he believes personal injury protection insurance can be salvaged.
Its impacting consumers, its impacting business owners, its impacting everybody in the state, Scott said Tuesday during a media event on the fourth floor rotunda of the Capitol. People are fed up and disappointed that people are taking advantage of the existing program that was set up to reduce the cost of insurance and exactly the opposite is happening.
Rep. Jim Boyd, R-Bradenton, has been tabbed to spearhead the effort to rein in personal injury protection costs from the rampant growth in insurance fraud that has spread from Miami to Central Florida.
Scott and Atwater have toured the state to discuss the impact of fraud to the coverage. Boyd said he hoped within a week to be able to craft a bill based upon Wednesdays workshop.
Because of fraud, Scott said, cost for the insurance has grown into the thousands of dollars for $10,000 in coverage.
Sen. Joe Negron, R-Stuart, has already started similar review efforts in the Senate.
Atwater has previously noted that although the number of drivers in Florida has held steady in recent years and the number of wrecks has decreased from 1.76 per 100 licensed drivers in 2005 to 1.52 last year, insurance costs have exploded.
Direct losses in Florida have gone from just over $1.6 billion in 2005 to $2.3 billion last year. Variable losses -- a calculation that includes things like legal defense costs, taxes, licenses and policyholder dividends-- have gone from $2 billion to $2.7 billion in that time frame. But they dipped to $1.8 billion in 2008 before they spiked last year, which is how the report derives the $910 million fraud tax.
The report noted that the average number of procedures per insurance claim have exploded since 2007 as medical facilities, such as massage clinics, have increased billings. Staged accidents have also more than doubled since 2008, the report concludes.
The areas Scott and Atwater want legislators to focus on:
- Fraud prevention. Florida leads the nation in staged crashes and questionable claims, and often individuals not involved in a crash receive PIP benefits.
- Litigation reform. From 2006 to 2010, PIP-related lawsuits pending at year end increased by 387 percent. Attorneys' fees often far exceed the value of the $10,000 coverage and the damage amounts in dispute.
- Utilization and provider reform. Florida is above the national average in the amount of medical provider charges per claim and the number of procedures per claim. Florida must address fraud and abuse to reduce these occurrences.
- Accountability. Scott and Atwater called for a plan to gather the data needed to evaluate the legislations overall effectiveness to stop PIP fraud and abuse and drive down rates.
Reach Jim Turner at jturner@sunshinestatenews.com or at (850) 727-0859 or (772) 215-9889.
