BY: KENRIC WARD | POSTED: FEBRUARY 22, 2011 3:55 AM Calling Florida the epicenter of an auto insurance "fraud epidemic," sector groups need the Legislature to crack below on scam artists who are driving up motorists' premiums.
"Floridians need to have knowledge of that our state, unfortunately, continues to have the highest many questionable, or ‘staged,' auto accidents of any other state within the country," spoke about William Stander, assistant vice president for Property Casualty Insurance Association.
Stander's team was joined by the Florida Chamber of Commerce and the Associated Industries of Florida in calling for reform — but not abolition — regarding the state's no-fault (PIP) insurance program.
"Florida's business community can no detailed afford to stand by and expect PIP fraud to leave away. We should do something now," spoke about Teye Reeves, the Chamber's director of business climate and quality-of-life policy.
Noting that Miami, Tampa, Orlando and Hialeah rank between the U.S. cities together with the highest rates of questionable claims, Stander spoke about Florida motorists pay the second-highest auto liability insurance premiums within the nation.
The 2008 average annual liability premium is $736 — 56 percent higher than the local mean of $471, he said.
The Insurance Details Institute estimates that, if left unchecked, the increase in premiums related to insurance fraud should reach $946 million for insured Florida drivers this year.
"PIP fraud is out of manage in Florida," spoke about Jose Gonzalez, vice president of governmental affairs for Associated Industries of Florida. Gonzalez spoke e&l insurance the efforts of an unique industry-launched website, InsuranceFraudUncovered.com, to highlight PIP fraud within the state.
The sector consortium spoke about it shall propose a series of legislative remedies during the 2011 session, including:EXAMINATIONS UNDER OATH: Stander spoke about court decisions have "created confusion" regarding an insurer's ability to investigate claims by creating use of a procedure called an examination below oath. These are routinely used to determine if fraud exists by interviewing the policyholder or provider regarding the alleged benefits received, below penalty of perjury for lying. The insurance sector recommends specifically authorizing the use of EUOs by insurers to investigate fraud.INDEPENDENT MEDICAL EXAMS: Within the course of investigating a claim, an insurer can conduct an independent medicinal examination on an insured to determine the extent of injuries and what sort of treatment is reasonable. If an insured is participating in a fraud ring, or even if an honest insured is just following directions from a clinic or PIP lawyer who is component of a ring, the insured many times misses or not ever goes to these appointments, sequential to hold the crime a secret.
Stander spoke about courts have allowed motorists' lawyers "to hold creating excuses for not ever showing up to an IME." The insurance sector recommends specifically stating that a refusal to submit to an IME is a rebuttable presumption that the failure was unreasonable.ARBITRATION: When disputes exist, they can many times be resolved faster and more efficiently by creating use of arbitration, which also saves the taxpayer money by reducing the caseload on the court system, Stander said. The sector recommends allowing an insurer to release a policy that includes arbitration as an alternative dispute resolution mechanism available to most the insured and the insurer, while preserving everyone's right to access the court system if necessary.
PIP LAWYER FEES: Florida PIP law requires an insurer to pay most its lawyers' and the insured's lawyers' fees if the insurer loses in court, even if the insurer thinks the claim is a scam.
"Sometimes the insured's lawyers' fees total higher than the original $10,000 in PIP coverage. This causes an insurer to ponder twice about challenging suspicious claims or medicinal treatments," Stander said.
Likewise, he added, "lawyers have an incentive to file as many lawsuits as likely for any reason, all the while driving up insurance costs for everyone else." Since a similar change to workers' compensation laws in 2003 resulted in substantial savings for policyholders, the sector recommends capping lawyers' fees in PIP litigation to a percentage of benefits obtained.PIP LAWYER FEE MULTIPLIER: In addition to their standard hourly fees, PIP lawyers should possibly obtain something called a "contingency risk multiplier." Originally developed to encourage attorneys to take on difficult civil rights cases, the multiplier now regularly shows up in PIP cases, and multiplies up to 3 1/2 times the no. of money a PIP lawyer can make in litigation.
"These inappropriate multipliers dramatically increase the PIP lawyer's incentive to sue in a no-fault system that is supposed to be free of litigation," Stander said. The sector recommends prohibiting the award of contingency risk multipliers in calculating PIP lawyers' fees.EXPANDED INVESTIGATION AND PROSECUTION: Between the many reforms that should help solve this problem, the sector seeks crash reports that with the names and addresses of all passengers, better licensure and inspections of PIP clinics, and more authority and funding for Chief Financial Officer Jeff Atwater and the Department of Financial Services. Critics regarding the sector proposals question the scope regarding the problem, alleging that little critical data exist on PIP claims due to the fact that insurance businesses closely guard such information. The Florida Department of Financial Services Division of Insurance Fraud only tracks complaints of possiblefraud reported to its agents.
Ed Domansky, spokesman for the Hollywood Rehabilitation Center, spoke about the envisioned PIP changes should sow confusion and uncertainty within the system, and should hurt legitimate health-care providers who should be left to absorb the costs of uncompensated care.
While Reeves called the reform product "a top priority" for Chamber of Commerce members, Stander spoke about he expects that consumer groups shall sign on to many components regarding the effort as well.
"High insurance costs are a concern for everyone," he noted.
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