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Florida Advocates Seek to Reform No-Fault Auto Insurance

March 3, 2011 by Brian in News, U.S. with 0 Comments

In Florida, insurers, government agencies and consumer advocate groups have launched a statewide alliance to call for legislative reforms aimed at cracking-down on staged-accidents that the industry says are costing Florida drivers nearly $100 higher in annual premiums. The Sunshine Alliance to Ease Fraud was created last year by the Consumer Federation of Florida, the Florida Insurance Council and the Coalition Against Fraud to pursue legislative reforms to Florida’s no-fault auto personal injury protection law. The alliance has since been joined by a broad array of insurers, consumer groups and government officials including Chief Financial Officer Jeff Atwater who has made no-fault reform a top priority.

The National Insurance Crime Bureau (NICB) has set up several fraud task forces in Florida to counter the increase in medical fraud. “Floridians are getting ripped off by the cost of auto insurance fraud and the evidence is piling up right along with the bills,” said Atwater. “We must act quickly to enact reforms to help stop these losses and keep Floridians’ hard-earned dollars in their pockets where they belong.”

The Florida Legislature is set to reconvene next week. House and Senate leaders have both indicated that no-fault reform will be at the top of their agenda. Drivers in Florida are required to carry at $10,000 in PIP insurance. Under the state’s no-fault law, insurers are forced to pay 80 percent of PIP claims, regardless of which driver is at fault. The law was created to guarantee motorists some coverage and abolish the need for litigation on smaller claims.

However, staged crashes have increased, according to the alliance. A fraud ring will stage an accident and then have fake passengers who are directed to crooked medical providers who order unnecessary medical tests until the $10,000 in coverage is exhausted. Walter Dartland, co-chair of the Sunshine Alliance and executive director of the Consumer Federation of the Southeast, said it is time to put an end to these practices. “Honest Florida drivers are being taken for a ride by greedy staged-crash gangs,” he said. “We must make no-fault a road to nowhere and help ease the pressure on honest drivers’ auto premiums.”