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Fix PIP now

3/8/2012

The Miami Herald

A promising effort to repair the state’s broken Personal-Injury Protection system has run into last-minute wrangling as the Legislature prepares to adjourn. This threatens to doom a desperately needed repair of auto insurance for Florida’s consumers.

Florida is one of the worst places for PIP fraud. It is home to four of the 10 worst cities in the nation for this racket: Tampa, Orlando, Miami and Hialeah.

The fraud consists of phony claims involving the $10,000 of medical coverage available to every driver under the state’s mandatory PIP law, sometimes referred to as Florida’s no-fault law.

Staged accidents that involve phony clinics and fake claims allow organized crime to scam millions of dollars every year. That hurts everyone. Consider a family of two drivers earning $40,000 a year. The average premium for that Miami family would be $1,861 — an unsustainable 13 percent of their income.

A study led by the state’s Insurance Consumer Advocate found that State Farm Mutual had increased its PIP rates by 50 percent since 2009, GEICO by 77 percent, and Progressive by 63 percent. Ouch!

The current system benefits PIP fraudsters. But because so much money is at stake and so many special interests are involved, the Legislature has repeatedly failed to enact reform.

Both the House and Senate have approved different versions of a reform effort that Gov. Rick Scott has made a priority. However, last-minute differences threaten to block progress. Lawmakers must keep trying, for the sake of everyone in Florida with car insurance.

The House version tightens the rules to make it harder to set up phony clinics and clamps down on needless reimbursement claims, as well as the number of visits and treatments that any alleged victim can claim. The Senate version, according to state insurance experts, would have little or no impact on premiums. It’s window-dressing.

The Senate should embrace House reforms and settle this issue. If not, Gov. Scott says he will call a special session, which will only make it costlier for Florida taxpayers. Why wait? Fix PIP now.