Monday, 30 January 2012
Fake Florida Auto Insurance Claims Lead To Proposed Reforms
There’s been a recent onslaught of fake auto accidents in Florida to scam money from insurance companies. It stems from the minimum $10,000 personal injury protection (PIP) coverage that all Florida drivers are required to carry. The $10,000 is to be used for personal medical treatment no matter who caused the accident. However, there have been numerous fake accidents recently and this has resulted in higher auto insurance rates for the entire state.
Many people, including Governor Rick Scott, are seeking new laws to help stop the fraud. Scott is asking residents to support House Bill 119 to put a halt to things. The bill would place a maximum cap on attorney fees and would force doctors to answer questions under oath regarding medical care given to supposed accident victims. In addition, anyone hurt in a crash would have to seek medical treatment from a hospital emergency room no more than 72 hours after the incident.
The purpose of the bill is to prevent fraud and forcing victims to seek treatment at a hospital should be able to do that. This is because much of the fraud is being carried out by several doctors and clinics that are in cahoots with the alleged victims. According to an article in the Miami Herald, most of the staged accidents occur when a car stops suddenly on the road and the car behind them bumps into it.
The driver and/or passengers in the lead car then immediately visit a doctor or clinic for treatment, which isn’t actually given since it isn’t needed and a claim for $10,000 in put in, which is then split by the doctor and driver, and possibly a lawyer. It’s believed that some clinics recruit drivers to take part in the scam and are walking way from fake accidents and injuries with thousands of insurance dollars. The state of Florida said PIP claims have risen by 275 per cent over the past five years.
The cost of the $10,000 PIP insurance is often higher than the price of $100,000 worth of liability coverage for drivers. The Senate has also introduced a bill to deal with the problem of fake accidents. This one requires the police to fill out more detailed reports while attending accident scenes. It also calls for the creation of a task force to deal with the fraud and for tighter regulation of clinics. This bill hasn’t been taken up yet by any committees though.
It’s expected that there will be changes to both bills, but many feel there will eventually be some type of laws that passes which will see insurance rates come down.
