Accident fraud is costing Florida drivers nearly an extra billion dollars a year in their personal injury protection insurance rates, according to Gov. Rick Scott. He's helping lead the push to reform the state's PIP system.
Gov. Scott was fired up Wednesday as he spoke to supporters of
insurance reform at the state Capitol. He argued the higher insurance rates resulting from fraud are like a tax. It's estimated Florida drivers pay 56 percent higher auto rates compared to other states.
Personal injury protection rates have been climbing about 30 percent a year in Florida even though there's been a 12 percent reduction in car crashes over the past five years.
Police blame drivers in organized crime groups for staging accidents and then running up medical bills to the $10,000 limit allowed by the state's no-fault law.
Gov. Scott urged the crowd to put the pressure on lawmakers to pass reform legislation.
"This is how laws get changed. You show up and you let your legislators know what you want. You are sick and tired of a billion dollars a year of fraud. You're tired of it. You're tired of scammers taking advantage of you. You're tired of attorneys taking advantage of you. Enough is enough. A billion dollars a year. We need to change this."
Florida Chief Financial Officer Jeff Atwater joined Scott at the rally. He said drivers with great driving records are getting hammered by rising auto premiums and that's not fair.
"A 40-year-old, perfect driving record, in Jacksonville, Florida in the last two years, 40 percent increase in their PIP coverage. Orlando, 58 percent. Miami, 80 percent. Tampa Bay, 81 percent."
Cydnee Knoth of Tampa expressed frustration at seeing her auto insurance continually go up even though she's a good driver.
"Every year I see my insurance rates go up on my auto insurance and, despite my excellent driving record, the rates go up every year. Listed on my driver's license is 'good driver.' I have been affected by PIP and my son has been affected by PIP. We need to have this changed."
The Florida Chamber of Commerce calls PIP reform legislation its top priority this year. David Hart says the legislation must crack down on staged accidents, fraudulent claims and attorneys' fees.
"Honest Florida families and businesses continue to take the brunt of this unresolved billion dollar problem. Florida cannot wait any longer for relief from the expense of fraud and litigation abuse in the PIP system. The time for PIP reform is now."
The business lobby group Associated Industries of Florida is also backing reforms.
"Sadly, Florida is number one in fraud among any of the 50 states. It's time for Florida to take serious and permanent action to help its Florida consumers and its Florida businesses," said AIF President and CEO Tom Feeney.
A House committee Wednesday passed a bill that cracks down on PIP fraud by a 10 to 5 vote. The measure still faces two more committee votes before it can head to the House floor.
Opponents of the House bill contend it would restrict people's choices on which doctors they want to see, as well as the timeline for their treatment.
A group called the Florida Consumer Action Network says the Senate's version is better because it looks out more for consumers.
posted by Jim Valek on
Mon., Jan 30th, 2012 in
Insurance Company Industry News
Insurance Fraud
With many insurance companies out there promising savings from a fifteen minute phone call you may ask the question "Why should I use an independent insurance agency and not just call up the company directly?" And that is always an option for drivers seeking new insurance quotes, however considering how complex and full of legalese insurance coverage policies can be the fast cheap quote may leave you under insured and expose you and your loved ones to both financial risk and leave you less secure.
Many large insurance companies agents are trained to get you in the door with a quick and painless sale, but only an experienced insurance agent will know what coverage you should really have for your situation to strict the correct balance of financial security and affordable premiums. Things get even more complicated when you are insuring your home. Homeowners insurance plans especially those super cheap ones from citizens or other state run companies will get your bare minimum for homeowners insurance but frequently leave you exposed to a variety of costs you may not be aware of.
Many costly non-disaster related problems can, and frequently do come up for homeowners, so be aware of what your homeowners insurance policy will, and will not cover before making a decision. Floridians don't have to look to far to find an example of a very costly non-disaster related problem - two words that strike fear into the heart of Florida homeowners across the state - "Chinese Drywall". For many the cost was not something they could afford to fix and as a result were forced to walk away from the property and end up in foreclosure. With such examples out there homeowners need to pay very close attention to the coverage in their homeowners policy.
As a family owned independent
insurance agency located in Sarasota Florida, the insurance experts at Valek insurance will work for you to both locate the best quotes for your insurance needs from a large group of carriers and underwriters as well as explain the coverage and premium costs in detail so you are educated about what your coverage will protect and what any costs may be should an accident or disaster or other costly issue result in a claim.
Don't be drawn into purchasing an inferior policy that leaves you exposed, work with an independent insurance agency to get the best insurance protection for your money.
posted by Jim Valek on
Tue., Oct 11th, 2011 in
Car Insurance
Homeowners
Insurance
insurance agencies
Insurance Company Industry News
A Florida state panel has approved the use of a new hurricane catastrophe model that is increasing many homeowner and Florida business insurers’ exposure.
The Florida Commission on Hurricane Loss Projection Methodology has approved the Risk Management Solutions new U.S. Hurricane Model version 11.0 for use in residential insurance rate filings submitted to the state’s Office of Insurance Regulation.
The new model calculates the probability of hurricane damages and financial losses taking into effect wind, other weather characteristics, and the density of development within a given area.
The RMS model includes a number of changes, but most notable is the change in loss projections. Based on the results of a three-year research and development project conducted with the University of Miami, the model decreases the risk of losses in coastal areas while increasing them in inland areas.
As a result, many insurance companies that specialize in providing coverage to
homeowners insurance in inland areas have seen their exposure increase by 50 percent to 70 percent.
Insurers have already been feeling the impact of the new model, which reinsurers have been using to set rates.
Bracing for the possibility of higher reinsurance rates, lawmakers inserted in this year’s property bill a measure allowing insurers to make separate filings for rates on reinsurance and financial interments needed to make up for the loss of other reinsurance products. The increase is limited to one per year with the rates not to exceeded 15 percent per policyholder.
If you have a question about how the new rules may effect homeowners insurance rates for your Florida homeowners policy contact the experts at Valek Insurance and Bonds.
posted by Jim Valek on
Fri., Sep 23rd, 2011 in
Homeowners
Hurricane Season
Insurance
Insurance Company Industry News
Is it a bad idea to skimp on long-term
disability insurance to protect your family? This is a question that many Boomers who are buying family
health insurance and
life insurance to protect their families are asking. A recent survey by Harris Interactive for America's Health Insurance Plans (AHIP) found that most Baby Boomers underestimate their risks for an extended period of time due to a disability. Why do baby Boomers underestimate their risks? One reason might be that they believe that they are more likely to suffer a disability than to die prematurely.
How far off are the risk estimates for most Americans? A study sponsored by the Life and Health Insurance Foundation or Education called " The Real Risk of Disability in the United States" has found that white collar workers between 35 and 65 years of age have a 27 to 31 percent chance of becoming disabled for 90 days or longer. Unfortunately, the duration of disabilities has increased within the past few decades. In the 1970s and 80s, a 35-year-old-male with such a disability would have been out of work, on average, almost four years. Today it's six, because better medical care means that people with a terminal types of illnesses will be able to live longer. It does not mean, however, that they are able to pull in their pre-disability income while they are ill.
Steven Crawford, a disability specialist, believes that a well designed disability insurance policy is the key to a sound financial plan. The problem is that often, a financial planner does not advise his or her clients that their income is their most valuable asset.
Everybody should have the maximum benefits they can afford, and many factors will change the cost of a given insurance premium. As an example a policyholder 20 years of age will have a greater risk and as a result a larger liability than a married 55-year.
It is an extremely time consuming process to figure out how to find low quality health insurance to meet your specific needs. First, you have to determine how much you will need to maintain your lifestyle remembering to factor in new expenses that could arise due to your disability. These include benefits from your employer's group plan, your personal savings and possibly government benefits that are related to social security and disability insurance.
Policies and coverage amounts are many and varied so consult with a
Sarasota Insurance Agency to be sure you are getting the correct coverage for your financial protection.
posted by Jim Valek on
Mon., Sep 12th, 2011 in
Be prepared
Insurance
Insurance Company Industry News
Policy Coverage
There are all kinds of
Florida Auto Insurance fraud, including staged accidents, inflated medical bills, phony injuries, owner give-ups, false repair bills and claim padding.
Millions of people fall victims to staged accidents every year without realizing it. These apparently simple fender benders are actually premeditated crimes, involving organized rings of doctors, lawyers and body shop owners.
Major Categories of Auto Fraud
Staged Car Accident.
A conspirator's pulls in front of an innocent driver's car and stops suddenly, causing the innocent driver to rear-end the conspirator's car. Sometimes a second conspirator's car providing the "excuse" for the sudden stop. The innocent driver believes he is responsible for the accident.
Typical Victims of this trap are usually driving alone in late model or expensive cars. Often a large older sedan is used by the criminal driver and two or three passengers will be riding along. Invariably the victim is later contacted by the criminal driver's lawyer, and the victim's
insurance company is expected to pay large, fraudulent medical bills for the driver and all the passengers in the car.
Owner Give-Up.
Car owners who arrange to have their cars "stolen" and disposed of so they can collect insurance money. It is estimated that about 15 percent of all vehicle theft claims fall into this category.
Auto Insurance Claim Padding
Car owners increase the amount often otherwise legitimate claim to receive more money than they are due. It's estimated that 10 percent of all claims are at least partially fraudulent.
posted by Jim Valek on
Tue., Jul 12th, 2011 in
Be prepared
Insurance
Insurance Company Industry News
Insurance Fraud
Citizens Property Insurance plans to revoke $5 million worth of discounts from policyholders.
Inspections conducted this year by Citizens, the largest property insurer in the state, found that some policyholders have been receiving undeserved discounts for features that protect their homes from hurricanes.
If Citizens customers don’t pay enough, all property insurance policyholders in Florida could be on the hook, just as they’re paying to cover state-backed Citizens’ deficits from the 2005 hurricane season.
Eric Ordway, senior director of vendor relations for Citizens, told the insurer’s
underwriting committee Thursday that identifying erroneous discounts helps policyholders determine how to fortify their homes “so in the event of a storm they’ll be better protected.”
But it will create an additional cost for policyholders who are already struggling with annual rate hikes. As Citizens and
private insurers roll out inspection programs this year to target discounts they suspect are too high, some homeowners and building inspectors have reported legitimate discounts are being cut, which could discourage homeowners from making hurricane-proofing improvements.
Ordway said that if Citizens determines a discount needs to be revoked, it won’t happen until the policy is up for renewal and if the policyholder qualifies for a discount they weren’t getting, it will be applied from the start of the policy.
If Citizens has trouble scheduling an inspection because a policyholder isn’t available, the discount could be revoked without an inspection, but that would only happen after the insurer has “exhausted all efforts” to schedule it, Ordway said.
Citizens reports that it has inspected more than 14,000 properties, or about a third, of the 44,220 condo buildings and houses that were assigned so far, at a cost of $894,705. More than 70 percent of the 7,213 inspections found policyholders owe more money, about 8 percent owe less.
Citizens plans to spend $41 million the next two years on more inspections, and it expects a “return on investment” of about $100 million because policyholders will likely owe $143 million more in premiums.
The inspections next year are expected to start in March and inspections during the second half of the year will include checking a home's rebuilding cost, its general condition and possibly for sinkholes.
Some homeowners with private insurers have reported the companies
increased estimates to rebuild their homes, leading to higher premiums, despite the construction slowdown.
Citizens drew fire
earlier this year for how it hired an inspection manager and
selected inspectors, but it has since used a competitive process to pick three managers to oversee the work.
Policyholders with questions about the inspections can call Citizens at (888) 685-1555. The insurer has an ombudsman to handle questions from condominium associations and their agents.
posted by Jim Valek on
Thu., Dec 23rd, 2010 in
Insurance
Insurance Company Industry News
