Inside The Industry: Florida Sees Drop in Auto No-Fault Questionable Claims
A national study found that Florida has seen its first decrease in questionable automobile claims since state lawmakers rewrote the no-fault law in 2012. The National Crime Insurance Bureau conducted the report that looked at claims from 2010 to 2013. According to the study, the number of “questionable” automobile personal injury protection claims fell by 7.66 percent between 2012 and 2013 — from 4,283 in 2012 to 3,955 in 2013.
The majority of those claims are for faked or exaggerated injuries, medical provider fraud, billing for services not rendered and excessive medical treatment, according to NICB. According to NCIB, a major reason for the drop in questionable auto claims is a significant reduction in the number of staged accidents, which were a driving force behind the rewrite of the no-fault law. Starting in 2010, the number of staged accident claims started trending downward. Between 2010 and 2011 staged accident claims dropped by 7.92 percent and then another 9.9 percent from 2011 to 2012.
However, the largest reduction came between 2012 and 2013 when the number of staged accident claims fell by 53.93 percent – from 712 in 2012 to 328 in 2013. Insurer groups are pointing to the 2012 changes in the law for the drop in claims. Those reforms sought to reduce costs by bifurcating PIP benefits so that accident victims with severe injuries are eligible for greater coverage than those with non-emergency injuries. Lawmakers also tackled PIP fraud by enacting tougher legal fees and jail sentences for those committing fraudulent acts like staging accidents. The 2012 law also excluded some medical providers such as massage therapists and acupuncturist from PIP reimbursements.
The Office of Insurance Regulation in January found that auto insurers have reduced their PIP rates by a statewide average 13.2 percent. That translated into an overall reduction in rates of four percent. Also, the state’s First District Court of Appeals in November lifted an injunction issued by a lower court that had prevented the 2012 reform of the state’s PIP law from entirely going into effect. The suit had been brought by a group of medical providers who challenged the constitutionality of the law on the grounds it impinged on accident victims’ access to the courts.
Some legislators have since questioned the long-term viability of the PIP law. Most insurers are in support of the 2012 law, which has ended any further discussion by lawmakers on the issue for now.
BB Insurance Marketing is a full-service insurance agency located in South Florida that specializes in business, personal and benefits insurance. Childcare, gas stations, pest control and restaurants are just a few of the niche markets we work in. BBIMI’s insurance expertise extends all across the state, so we’ve got you covered with a quality policy you can depend on!