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Florida No-Fault Insurance Often Suffers From Fraud
By Mike Heuer

 

Florida one of a dozen states in which no-fault auto insurance is mandated, which has become a primary source of fraud and abuse.

Designed To Reduce Court Cases

The intended purpose of no-fault insurance is to reduce the number of lawsuits arising from vehicular accidents and pays up to $10,000 for medical expenses regardless of who is at fault. Unfortunately, Florida has become a primary target for illegal activities targeting its no-fault insurance provisions, and that means drivers in the Sunshine State have one of the highest average insurance rates in the nation. Florida drivers pay an average of nearly $1,800 per vehicle in annual insurance costs, which is more than double the amount paid in low-cost states that do not have no-fault insurance.

Other states where no-fault insurance policies are mandated are Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah. And motorists in New Jersey, Pennsylvania and Kentucky have the option of choosing no-fault, which also is called Personal Injury Protection car insurance.

Pays Medical Costs Regardless Of Fault

The insurance plans will pay the costs up to coverage limits for medical bills and treatments if injured in an accident. The bills will be paid no matter was at fault, and that reduces the number of possible court cases arising from vehicular accidents. Fewer court cases in theory save money and speed up the legal process for more important legal matters.

Unfortunately, personal injury protection policies attract a great deal of insurance fraud in Florida and elsewhere. Florida now has an Auto Insurance Fraud Strike Force tasked with helping fight and reduce the amount of fraud occurring in the state. Personal Injury Protection insurance fraud is the one for which the most tips are given from Florida residents with workers compensation fraud coming in a distant second.

Fraud in Florida often occurs when criminals stage an accident and then have doctors, chiropractors, acupuncturists, massage therapists and other licensed medical professionals sign off on bills for treatments and other medical services that never were provided. Because health care bills are paid automatically up to the $10,000 coverage limit, many criminal enterprises run alleged victims through fake medical clinics where licensed doctors sign off on treatments never performed on injuries that never were suffered. The illegal activity winds up costing insurers and, ultimately, policyholders a great deal.

Lawmakers Trying To Fight Fraud

Florida lawmakers recently enacted legislation designed to curtail the use of at least some of the licensed medical personnel from automatically signing off on insurance provisions that never were provided by chiropractors, massage therapists and acupuncture specialists. The law has been challenged but recently was upheld by an appellate court. State lawmakers also are considering scrapping the personal injury protection insurance law altogether, but they caution doing so would not put an end to insurance fraud in the state.

Mike Heuer is a former insurance producer in Nevada with expertise in Property & Casualty and Life and Health insurance. He also is a former newspaper reporter with 20 years’ experience in print media.

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