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Insurance Industry Wants Florida Lawmakers to Clean Up PIP Scammers

Posted on January 20, 2011

According to the insurance industry, South Florida is second in the nation in PIP insurance fraud. Personal injury protection (PIP) is the portion of your policy that insures medical bills will be paid up to $10,000 and it’;s required to be carried by every driver in Florida, no matter how expensive their car. Even a “clunker” car must have PIP insurance which pays regardless of fault, within 30 days.

It is the no-fault nature of PIP that has crooks staging accidents and illegally collecting PIP, and the insurance industry is asking Florida lawmakers to do something to stop the fraud during the upcoming March legislative session, according to a report in The Miami Herald.

The article discusses the Fort Myers Chiropractic Center, an unlicensed facility that billed Direct General Insurance for a nonexistent car accident. The only way investigators discovered this oversight was that the purportedly injured man was in jail at the time of the alleged accident. In many cases, unemployed persons or immigrants are hired to claim they were in a Florida car accident and go to a clinic where they allegedly receive services which are then billed to the insurance company. A scammer can make up to $10,000 per person and just two new patients in the clinic a week can easily generate $1 million a year. However, it is very tough to prove insurance fraud because of the quick turnaround time in paying the claims.

Staged Florida car crashes that bilk the insurance companies also cost consumers — about $400 for each family, which drives up the cost of insurance and makes Florida’;s auto insurance premiums the fourth highest in the nation. Progressive Insurance calls PIP fraud the “driving factor” in its 8.5 percent rate hike request last year.

Almost four years ago, the state moved to end PIP; however, for many Floridians who have no health insurance and who cannot afford more comprehensive auto policies, PIP coverage is the sole source of medical compensation when they are injured in a motor vehicle accident. Dropping a PIP requirement would adversely affect the millions of Floridians who have no medical insurance.

If you have been involved in a car crash in Florida that was caused by another driver’;s negligence, contact the Florida car accident lawyers at Farah & Farah to learn more about your legal rights as an injured victim. Call us today at 1-800-533-3555.