No-fault fraud, or “fraud tax”, is something Floridians are too familiar with. It is no secret that Florida is one of the states with highest number of questionable auto insurance claims. Some insurance industry insiders say that personal injury protection (PIP) fraud is getting out of control.
It is easy to say that whoever breaks the law should be punished and pay for it, but the problem is that the ordinary law-obeying citizens of the Sunshine state are the real victims here. The figures suggest that in 2011 the cost of these fraudulent claims can reach up to $940 millions. Of course, in one way or another, insurance companies will spread their losses by increasing premiums.
Immoral lawyers, corrupted medical practitioners and criminal gangs are at the root of it all. Their schemes and operations are often run almost professionally. After all, its a lucrative business and seen by many as “easy money”.
Tampa is recognised as the centre of no-fault fraud in Florida. An interesting statistic shows a dramatic increase in PIP clinics to operate without a license in the Tampa area.
Senate Bill 1694 aims to change all that. Capping layers fees and inspecting PIP clinics are just some of the solutions to the “fraud tax” problem. Recent survey suggest that motorist in Florida do welcome such changes but express concerns as well. The main worry is that insurance companies may try to use the situation to their advantage and make life difficult for people with legitimate claims. Even now, there are some instances where insurers are unjustly delaying payments and making real victims’ life an absolute nightmare.
It soon becomes apparent that the only way forward is if legislators, insurance companies, law enforces, anti fraud organizations and the citizens of Florida work together. Open communications, cooperation and transparency are the key to rooting out the no-fault fraud.
The economic situation in the country is tough enough without hard working Americans having to pay hundreds of dollars a year as a result of the criminal activities of people who are trying to cheat the system. As a Floridian, I hope that soon the new measures will be implemented and have the desired impact. We will all welcome lower insurance rates and no more hidden fraud tax.