Opinion

PIP Pests Put Pundits in Pickle

FRAUD. A nasty word, describing a crime that one human inflicts on another. For too long, Florida has been No. 1 in the country as the hot spot for auto insurance fraud. It’s time for the legislature to act.

Fraudsters use Florida’s PIP (Personal Injury Protection) system to stage fake accidents to reap mini-windfalls from insurance payouts. But that’s not the whole story. Too often, these same criminals team up with dishonest health care providers and unethical attorneys to game the system for serious money payoffs, creating huge costs that are passed on to the consumers of Florida in the form of higher insurance rates.

A Florida Grand Jury Report concluded that “greedy and disreputable lawyers, doctors, and chiropractors” are perpetrating “PIP fraud”, resulting in insured persons being taken advantage of.

But you can thank the Supreme Court of Florida for making this problem worse. In their zeal to tie the hands of law enforcement to operate against fraudsters, the “Supremes” recently issued a ruling that scatters logic and effective legal action to the winds.

Enter Senate Bill 1694 and House Bill 967: real solutions that Associated Industries of Florida, the Florida Chamber of Commerce, and other business groups around the state are supporting, as a means to counter a coddling court and to minimize yet another hurdle to Florida’s full economic recovery.

The Insurance Information Institute estimates that, if left unchecked, the increase in premiums related to insurance fraud, a.k.a., the “fraud tax,” could reach $946 million for insured Florida drivers in 2011. Insurance fraud is a particularly serious problem in Tampa, Orlando, and S.E. Florida. These areas rank in the top 10 in the U.S. in rates of questionable auto claims. It’s an economic downer when any Florida city or metro area shows up on this list.

County court judges routinely award very high hourly fees to PIP plaintiff attorneys for uncomplicated litigation. These plaintiff attorneys have incentives to file as many lawsuits as possible, trying to hit the jackpot with one case. This financial incentive produces serious temptations to aid and abet fraud.

And, based on the latest data available, Florida motorists as a group pay the second highest auto liability insurance premiums in the nation. Florida’s business community recognizes, and stands ready to support the legislature in this fight to end unchecked PIP fraud in Florida. We can’t continue to allow criminals to cause bogus accidents, abuse our healthcare and courtroom resources with questionable treatments and legal action, and then pass on the costs to those citizens that keep our system solvent.

Business applauds those Senators and Representatives taking leadership on this issue, and we urge the full House and Senate to follow their lead.

John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company. He is a frequent columnist for BizPac Review.
John R. Smith

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