By: Michael Peltier
TALLAHASSEE — Confronting an industry costing motorists $1 billion a year in higher premiums, lawmakers this week will turn their attention to reining in costs for an increasingly controversial coverage that was supposed to save money by keeping people out of court.
Personal injury protection, commonly referred to as PIP, is a required coverage on all automobile insurance policies. It provides up to $10,000 in coverage for medical treatment following an accident.
The premise behind the coverage was simple: Provide injured motorists with some medical coverage instead of requiring that they sue the driver who caused the crash. Attorneys stay out of the picture, injuries are taken care of and drivers without other insurance are guaranteed at least a modicum of medical coverage.
Simple enough. The fact is most injured motorists who tap into the system do so honestly and receive appropriate treatment from equally honest providers.
But the coverage has become increasingly expensive and controversial, thanks to a combination of American ingenuity and outright fraud. The $10,000 carrot has spawned entire industries both legal and illegal to tap into that ready pool of cash.
Radio commercials for lawyer referral services flood the drive-time radio airwaves. Meanwhile, a shadowy world of staged crashes, bogus medical clinics, massage therapists, MRI offices and "patients" employed in an organized scheme to rip off the system $10,000 at a time.
Following a report released last month, the state's insurance consumer advocate told Gov. Rick Scott and the Cabinet that the only thing panel members could agree on was that the premiums for personal injury protection are skyrocketing as the number of claims filed continues to rise while the number of accidents remains the same.
"It's lawyers, providers and insurance companies fighting over a pot of money the consumers paid in and keep paying in at an extraordinary level," said Robin Westcott, Florida's insurance consumer advocate. "Each day seems to be worse."
Westcott led a working group set up by lawmakers to develop a slate of recommendations to curb rising costs in the program. Florida is one of about a dozen states that continues to require motorists to pay for such coverage.
After a series of meetings, however, the working group made up of representatives from health care providers, insurance companies, law enforcement and other affected parties concluded its work without reaching any set of recommendations.
"Nobody agreed on anything," Westcott said.
A report by the Florida Chamber of Commerce asserts that despite decreases in the number of crashes and steady population growth, PIP claims have risen from under $1.5 billion in 2008 to nearly $2.5 billion last year.
The number of staged crashes also appears to be rising based on the number of claims that have been referred to fraud investigators, which has more than doubled since 2007. Companies have responded by raising PIP rates anywhere from 35.5 percent to 72 percent since 2009.
This week, committees in both the House and Senate will discuss ways to rein in those costs. What remains to be seen is if the players whose representatives failed to reach agreement earlier this year will continue to thwart changes that raise the cost of insurance for average, law abiding motorists, a constituency that seems to be the only voice not amplified in this debate.