Opinion

PIP reform moves forward on grossly inflated numbers

As the Florida Legislature nears its halfway point in this year’s session, competing bills aimed at ridding fraud from the Personal Injury Protection system are working their way through key committees in both chambers.

And as arrests of cheats who stage fake accidents continue to make headlines, it goes without question that there are those out to game the system – and that’s a problem that needs to be addressed.

But let’s get real about how much fraud truly exists. Only then can we properly frame the debate on how to reform PIP and come up with measures that truly tackle the issue at hand.

State leaders and the insurance industry continue to throw out mind-boggling figures as to fraud’s impact on Floridians’ mandatory no-fault premiums, but their numbers have no credible basis in reality. Gov. Rick Scott and CFO Jeff Atwater, for example, continue to say PIP fraud is costing state drivers an extra $1 billion a year in insurance coverage.

That’s a staggering number. No wonder it’s getting lots of attention. But what data is it based on? No one truly knows. What’s worse, it is complete fiction that continues to go unchallenged – by lawmakers using it to back sweeping, pro-insurance reform measures and news reporters and editorial writers who refuse to do their job by demanding proof of its accuracy.

Let’s think about that number and try to come up with a scenario where fraud could produce that kind of mammoth, unchecked power.

PIP claims are limited to $10,000. Most claims don’t exhaust that coverage, so let’s assume, for the sake of argument, that the average claim filed is $5,000. For Florida drivers to pay $1 billion extra a year wholly due to fraud, no fewer than 200,000 fraudulent claims would have to be filed each year – all from fake accidents, all of them paid out without being flagged for possible abuse of the system.

Such a ridiculous scenario simply makes no sense, common or statistical. While the insurance industry has gotten away without revealing closely guarded data detailing their claim history, we do have some hard numbers, and they do nothing to back up this exaggerated fraud bogeyman. According to the Florida Department of Motor Vehicles, for example, the entire state sees fewer than 250,000 accidents in a single year. Does anyone really believe four out of five of those accidents are staged? Please.

The industry itself only lists a few thousand referrals to state investigators for possible fraudulent claims each year. While that number may be growing, it hardly amounts to the colossal fraud picture insurers and their puppets in Tallahassee want us to believe.

I’ll say this again: There are scam artists who are staging accidents and faking medical treatment claims to cheat the system, and they must be stopped. But let’s stop the histrionics, too, and finish the rest of the legislative session with real statistics that reflect the true picture of fraud’s impact on Florida drivers. If we don’t, then state lawmakers are only cheating their constituents all over again.

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