Despite cries of foul from plaintiff lawyers, Personal Injury Protection (PIP) benefit payments continue to rise and with that, so does rampant abuse of auto insurance. The latest numbers on PIP fraud were revealed at a summit in late June 2011.
More than $8 billion in PIP claims have been paid in the past five years, said Monte Stevens of the Government Affairs Unit of the Florida Office of Insurance Regulation. The rate of PIP-related lawsuits has increased by over 300 percent during that time.
Another disturbing trend: $1billion more was paid out in auto insurance claims in 2010 than 2009, according to the OIR.
The summit was called because PIP fraud has become widespread in Florida. The state has 3 of the top 10 cities for PIP fraud in the nation, according to the National Insurance Crime Bureau (NICB).
By Florida law, drivers must carry PIP insurance. The coverage pays up to $10,000 in benefits and lost wages per incident. Each Florida driver pays an extra $49 per year in PIP premiums due to fraud, according to insurance industry estimates.
Action is needed, agreed the summit participants who included Florida Chief Financial Officer Jeff Atwater and Florida Rep. Bryan Nelson (Apopka), Rep. Geraldine Thompson (Orlando), Sen. Gary Siplin (Orlando) and representatives from the OIR, NICB and Central Florida law enforcement agencies. The Rotary Club of West Orlando hosted the event.
When Sen. Siplin asked CFO Atwater about enforcement efforts, Atwater said his goal was to punish fraudsters. He asked event attendees to contact Florida’s insurance fraud hotline or the state prosecutor’s office if they suspect auto insurance fraud.
Atwater also advocated holding more PIP-fraud summits around the state to make drivers more aware of how much extra they pay in premiums due to widespread fraud.
Florida Rep. Mike Horner (Kissimmee), who was in the audience, told the group that efforts to stem PIP abuses through legislation failed during the 2011 legislative session. He said reform measures failed due to lobbying pressure from the legal and medical communities, which profit from the PIP system through lawsuits and benefit payments.
Rep. Horner said he plans to re-file PIP-reform bills in the 2012 session.