The Problems With PIP Auto Insurance
When it comes to auto insurance not all states are created equal. One thing a few states have that others do not is Personal Injury Protection or PIP insurance. This coverage pays for medical expenses for the driver and sometimes passengers in the event of an auto accident. No-fault states like Florida require drivers to purchase this benefit so they can get prompt medical treatment. But the law has resulted in many things including higher costs of insurance and widespread fraud.
Insurance.com reported recently that Florida is the nation’s staged-accident capital, largely due to the $10,000 PIP coverage for medical expenses. As previously discussed in this blog drivers involved in this insurance fraud purposely cause accidents to gain access to their PIP money. They will often partner with dishonest medical personnel who bill for services not needed or rendered. These situations make it difficult for a Tampa auto accident lawyer to help those who legitimately require their representation.
The fraud costs insurance companies around $1 billion each year. Paying these false claims causes insurance costs to go up, with a two-car family paying approximately $100 more a year to cover the fraud payments. Since 2008, there has been a 119% increase in the number of staged accidents in Florida, which will likely mean insurance premiums will continue to rise.
Groups like the Sunshine Alliance to Erase Fraud work to reform the no-fault laws in Florida. Current proposals call for an increased budget for investigations, closing loopholes in clinic licensing laws, harsher fraud penalties and reduce premiums for those who use specific medical providers. An alternate to reform would be to eliminate no-fault laws entirely. 38 states do not have no-fault systems and often have lower insurance costs.