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Insurance Consumer Advocate

Sha'Ron James

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Mailing: 200 East Gaines St.
Tallahassee, FL 32399-0308

For Consumer Assistance:
Contact the Division of
Consumer Services within the
Department of Financial Services

Online at
Consumer Services
Toll-free in Florida
Out of State
(850) 413-3089
(850) 413-3033

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Florida’s Consumers Deserve Auto Insurance Rate Relief

Press Release

January 5, 2012

The skyrocketing cost of auto insurance and its impact on Floridians already struggling in this down economy prompted me to review and gather data on Florida’s no-fault auto insurance system. Chief Financial Officer Jeff Atwater appointed me to serve as Florida’s Insurance Consumer Advocate in July to be the watchdog for consumers and to ensure Floridians are protected from fraud and abuse. I am doing just that.

Based on the data I have gathered, it is impossible to deny that Florida has a continued and escalating problem with Personal Injury Protection (PIP) fraud. The fact is over the past five years, there have been fewer auto accidents and our population has remained relatively stable, yet the number of PIP claims filed has risen dramatically. In the past two years, fraud and abuse have infiltrated this coverage so much so that the initial value of such a system is, at best, diluted and now threatens to be unreasonably expensive for Floridians. We are now at a crossroads as to whether the climbing costs outweigh the benefits to consumers.

My report (located at http://www.myfloridacfo.com/ICA/PIPWorkingGroup.htm) to the Legislature speaks to the fact that Florida’s consumers are required to purchase a coverage that they can no longer afford. PIP was designed to help avoid the court system and promote personal responsibility for those who operate motor vehicles in our state. It is far off course. Conservative estimates say that the cost of PIP will double every three years at the current pace, all to pay for a coverage under which the most frequent medical procedure is massage therapy. My goal is to provide the most accurate information and data that can be used to shape the policy debate surrounding PIP. During the 2012 Legislative Session, I urge policymakers to consider the policy reforms in the following areas based on data I have reviewed and compiled.

Providers and Venue: The majority of PIP claims originate from a chiropractor, acupuncturist or massage therapist and are provided at a clinic rather than a doctor’s office or hospital.

Over-utilization: In the five hardest hit counties, the average cost per claimant has increased by 91.3 percent over the past five years.

Electronic Claims Filing: A modernized claims filing system would allow law enforcement to identify and track potential fraud.

Litigation Costs: Through August 2011, there were 46,842 lawsuits filed and records indicate a steady increase per month beginning in 2009 in the number of lawsuits filed with almost 9,215 lawsuits filed in August 2011 alone.On behalf of the consumers of this state, PIP must change and it must change drastically. It’s time to get consumers back to the intended benefit at a reasonable price. I am confident that our policymakers will be successful and, when they are, I will be there to make certain that insurance companies respond with lower rates for Florida’s consumers.

The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Jeff Atwater and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.