Florida Fighting Rising Car Insurance Costs
Due to the high number of uninsured drivers, Florida isthe most expensive state in the country to purchase car insurance in. But, the high number of uninsured drivers is not the only factor causing insurance premiums to rise dramatically – auto insurance fraud is causing premiums to go up by almost $1 billion dollars every year.
Premiums have risen as much as 80% in some areas of Tampa and Miami since 2008. Over the same time period, insurance claims have risen by 40%, even though total accidents have declined by 8% in the state.
Governor Rick Scott has chosen to start at the root, the rampant issue of personal injury protection fraud. This week the Florida State Legislature started considering their options: hiring more fraud investigators, capping attorney’s fees, even limiting the amount of rehab care an accident victim can receive.
For decades the state has required all motorists to carry at least $10,000 in personal injury protection coverage, creating a vast pool of funds for insurance vultures to pick away at.
Often referred to as “ambulance chasing,” corruption in the PIP system runs deep; lawyer referral services are constantly running television ads, promising the recovery of lost wages and fully paid medical expenses; runners hunt down victims of fender-benders from accident reports and funnel them to clinics for a fee. With the $10,000 PIP benefit there is considerable money to be made.
Some skeptics believe the PIP benefit lends itself too easily to rampant fraud and should be eliminated. Hospitals and insurance companies feel that the $10,000 benefit should be increased.
The victims are obviously middle-income families. Already saddled by one of the markets hardest hit by the economic recession, Florida families are forced to somehow come up with ever-increasing car insurance costs while wages stay stagnant and jobs are hard to come by.