Every day Floridians are targeted by individuals seeking to use them as pawns in schemes to defraud and collect millions, and it is costing Florida families as much as $100 in higher auto insurance premiums every year. Its called personal injury protection (PIP) fraud and efforts are under way in Tallahassee to protect Floridians and give law enforcement officers the tools they need to stop it before it occurs.
Last month, the Sunshine Coalition to Erase Fraud joined Chief Financial Officer Jeff Atwater, Sen. Ellyn Bogdanoff, R-Fort Lauderdale and Rep. Jim Boyd, R-Bradenton in introducing anti-fraud measures with stiffer penalties for the unscrupulous swindlers. The Sunshine Coalition to Erase Fraud is a statewide alliance of consumer advocates, insurers and government agencies pursuing legislative reforms to save consumers money and crack down on rampant staged-accident rings that are looting Floridas no-fault system and raising auto premiums for honest drivers.
Fake and phantom injury claims from widespread and loosely organized fraud rings lie at the heart of spreading scams. Motorists also could be injured or killed if theyre maneuvered into staged crashes on roadways. In another fraud trend, recruiters for crash rings try to badger real crash victims into unknowingly seeking treatment from crooked clinics.
According to the Insurance Information Institute, staged crashes and bogus medical treatment will add about $1 billion in fraud costs to Floridas no-fault auto system by the end of 2011 if the current trends continue. Additionally, the Institute's estimate costs of auto-insurance fraud from 2009 through 2011 could exceed $1.5 billion if nothing else is done to address the problem.
Unfortunately, Florida is the nations ground zero for PIP fraud. Florida leads the nation in generating suspicious claims involving staged crashes, according to the National Insurance Crime Bureau. Tampa, Miami and Orlando rank among the top five cities nationally for suspected staged accidents, NICB says.
Florida also accounts for 30 percent of questionable claims involving staged crashes. Widespread no-fault fraud is a driving factor in skyrocketing auto premiums in Florida. In fact, fraud steals $100 from the pockets of Floridas two-car families each year. Progressive Insurance has cited PIP fraud as the driving factor behind rate increase requests due to increased fraud activity.
In recent weeks, Chief Financial Officer Atwater has created a series of PIP fraud task forces to help stem the tide of staged accidents and fraudulent auto insurance claims. According to the CFOs office, PIP fraud accounts for more than 40 percent of Floridas annual insurance fraud and has become a serious problem for many Floridians. The CFO has established PIP squads in Tampa, Orlando, Miami, West Palm Beach and Plantation.
Members of the Sunshine Coalition to Erase Fraud applaud the efforts of CFO Jeff Atwater, Sen. Bogdanoff and Rep. Boyd. Our coalition looks forward to working with lawmakers to ensure the state is well prepared to protect consumers and put an end to PIP fraud once and for all.
Walt Dartland is the co-chair of the Sunshine Alliance to Erase Fraud and the Chairman of the Consumer Federation of the Southeast.
