1/25/2012
By: Chad Hemenway
PropertyCasualty360.com
Florida moved closer to putting an end to its personal
injury protection automobile insurance system, which the
insurance industry says is plagued by abuse and fraud.
The Florida House Civil Justice Subcommittee passed
HB 119
this afternoon. The bill replaces the mandatory PIP,
no-fault insurance coverage with “emergency care
coverage.”
The American Insurance Association, a supporter of PIP
repeal, released a statement to commend the
subcommittee. For years the industry has
alleged fraud
by the state’s healthcare clinics, along with outrageous
attorneys’ fees and organized staged-accident rings to
take advantage of holes in the system.
The Florida Insurance Council, Property Casualty
Insurers Association of America (PCI), Reinsurance
Association of America, and the Bermuda Association of
Insurers & Reinsurers are also backing efforts by to
reform the state’s auto insurance system.
"Florida is the No. 1 state in the nation for staged
accidents, which has resulted in an unnecessary, nearly
$1 billion fraud tax on consumers over the last 3
years," PCI says in a statement. "With four out of the
10 U.S. cities with the highest rate of questionable
auto claims being right here in Florida – Tampa, Miami,
Orlando and Hialeah – we must transform Florida’s no
fault system now, so Florida’s most honest consumers and
businesses do not continue to get stuck with the tab."
The industry would appear to have the backing of the
state’s leaders. Also today, Gov. Rick Scott, Chief
Financial Officer Jeff Atwater, Insurance Commissioner
Kevin McCarty and Consumer Advocate Robin Westcott
gathered in front of the state capitol in Tallahassee to
promote reform.
In
Scott’s state of the state
address earlier this month he laid out the case for
reforms to cut down on fraud.
Scott and Atwater have outlined
four steps to reform
the no-fault law, first enacted in the early 1970s,
which requires drivers to have PIP that provides $10,000
in coverage per person for medical bills, regardless of
fault in an accident.
HB 119, among many things, would change accident reports
are taken, provide coverage limits, establish a schedule
of maximum charges, create a list of diagnostic tests
deemed not to be medically necessary, and control
attorneys’ fees.
The bill now goes to the Economic Affairs Committee, AIA
reports.