FOR IMMEDIATE RELEASE
15 August 2007

Contact:
J. Trumon Phillips
Kristin Heilman
850-222-1996

Consumers Demand Relief from PIP Fraud
-Group calls on People’s Governor to extend PIP and prevent potential five million uninsured drivers-

Tallahassee, Fla. – The Consumer Federation of the Southeast called on Governor Crist to add PIP to the agenda for this September’s special session to prevent a “Wild West scenario” of uninsurance and provide consumer relief from fraud.
“The PIP system is damaged, not totaled,” said Walter Dartland, executive director of the Consumer Federation of the Southeast. “That is why we are calling on Governor Crist and the state legislature to renew it while implementing key, anti-fraud reforms.”

Without legislative action PIP will expire on October 1 and any Florida motorist will be allowed to drive without insurance, including the four million currently holding only the legal minimum coverage, who will join another one million already uninsured – a combined population representing one in three vehicles on the road.

“As consumer advocates, we do not have a political axe to grind,” said Dartland. “But we do feel very strongly that the issue of PIP reform is one that affects all Florida motorists, and, as such, the consumer voice must be heard.”
The group explained that eliminating the PIP requirement would be harmful to both lower income consumers as well as fully insured drivers.
“With nearly 20 percent of Floridians lacking health insurance, eliminating PIP would remove the only safety net that many lower income residents have in the event of an accident,” said Dartland.
Rather than a speedy claims process, insured drivers would often be required to turn to lengthy and potentially costly litigation to recover damages from accidents involving an uninsured motorist. Furthermore, drivers could be liable in excess of their policy limits and may need to expand their insurance coverage.
It is also anticipated that insurance premiums would rise to cover the costs of accidents involving uninsured drivers. Similar shifts are also expected in the price of health care as uninsured motorists turn to the emergency room for primary care after an accident.
“The old saying holds,” said Dartland. “There is no free lunch.”
The consumer group urged the Governor to call on the Legislature to extend PIP and to convene a pro-consumer PIP reform workshop with input from CFO Alex Sink, Insurance Consumer Advocate Robert Milligan, Commissioner of the Office of Insurance Regulation Kevin McCarty, Director of the Division of Insurance Fraud Vicki Cutcliffe, representatives for consumer organizations, trial lawyers, the insurance industry, hospitals, medical professions and other interested parties.
“The result of fraud is higher premiums,” said Dartland. “Rampant fraud has contributed to an 18 percent spike in the average PIP claim payment since 2002. At the same time, the number of accidents resulting in disability has gone down five percent.”
The group was joined by Dennis Jay, executive director of the Coalition Against Insurance Fraud, a nationally recognized fraud fighting organization. Jay explained that Florida’s PIP crisis has been long in coming and that history has shown that inaction will be to the detriment of consumers.
“It’s not like none of us saw this coming,” said Jay. “The level of fraud involving PIP has been hitting us in the face for years.”

He urged lawmakers to look outside of the state for solutions.

“Massachusetts has focused on high-fraud areas by forming multi-agency task forces in communities that bring together a variety of government agencies to work with local police to prevent staged accidents,” said Jay. “The results have been impressive in reducing suspected fraud. In the six communities that were targeted, auto accident claims dropped by $100 million in one year alone. And as a result, auto rates have fallen in the state for the second year in a row – this year by 9 percent.”