Florida Lawmakers Seek to Address Personal Injury Protection “Fraud Tax”

Florida Lawmakers Seek to Address Personal Injury Protection “Fraud Tax”

Florida Lawmakers Seek to Address Personal Injury Protection "Fraud Tax"

November 15, 2011
By: Scott Distasio
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This summer, Robin Westcott was put in charge of a work group to study the increases in payouts under Florida's no-fault insurance system. The group met with members of Governor Rick Scott's cabinet in early November to discuss personal injury protection insurance and the $910 million "fraud tax" built into the costs of auto insurance.According to the Orlando Sentinel, the group found that while there has not been an increase in the number of Florida drivers and the number of car accidents has actually decreased, insurance costs have skyrocketed. Losses have risen from $1.6 billion to $2.3 billion in 5 years. Legal costs, taxes, and other variable losses have increased from $2 billion to $2.7 billion as well. Florida's Chief Financial Officer Jeff Atwater concluded, "What we're getting billed for is fraud, fraud, fraud, fraud."The average number of procedures per PIP claim has risen sharply since 2007 and staged car accidents have doubled since 2008. Ultimately, these costs are passed onto consumers who, according to Governer Scott, are paying a "tax for the right to live in Florida."Unfortunately, fraud like this gives legitimate car accident attorneys and their clients a bad name. It makes the general public think all claims are fraudulent. The truth is that the overwhelming majority of claims do not involve fraud. As Florida lawmakers debate how to clean up the system, they should make sure their fixes do not harm their legitimately injured constituents.Some argue that new limits should be placed on certain types of services. Others believe the law should more clearly indicate when lawsuits should be filed. Perhaps the most reasonable idea being discussed is to eliminate personal injury protection coverage altogether. This would significantly reduce the number of fraudulent claims by con artists taking advantage of Florida's laws, thereby reducing insurance costs for Florida drivers.
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