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Tallahassee Lawmakers Tackle Auto Insurance Fraud

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TALLAHASSEE – (CBS4) – Florida’s automobile insurance rates are among the highest in the nation and experts say fraudulent claims drive up the price hurting everyone’s pocketbooks. 

The state legislature listened to experts including Florida Chief Financial Officer Jeff Atwater on Wednesday who said Florida’s no-fault insurance law contributes to the large number of fraudulent personal injury claims brought on annually. The average driver pays $50 a year per car to help fund the state’s no-fault insurance system. It’s a system that has been helping fraudsters collect millions of dollars in false claims. 

“It’s more than unfair, it’s unconscionable,” Atwater told members of the House Banking and Insurance Subcommittee. 

Tackling the issue means limiting who can collect Personal Injury Protection (PIP) funds and it’s likely to pit business groups against trial attorneys over reimbursement regulations. Insurance groups asked lawmakers to tighten up the law to prevent the millions of dollars collected fraudulently. 

Committee chairman Bryan Nelson, R-Apoka, said the committee will wait for a personal injury fraud survey expected to be released in April by the Office of Insurance Regulation. 

Nelson, an insurance agent, said a more immediate fix the problem is to have the legislature deal with laws aimed at cracking down fraud and tightening clinic licensures. 

“This is the crisis today,” Nelson said.  “Hurricanes are a crisis for tomorrow. (Fraud) is an issue from the Panhandle to the Keys.” 

Florida’s no-fault insurance system dates back to 1971 and its purpose was to allow accident victims to collect $10,000 to cover personal injury expenses in exchange for not taking the case to court. The no-fault system pays any party of an accident regardless of who was at fault.

(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. News Service Florida substantially contributed to this report.)

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