State Report Says Law Against 'No Fault' Fraud Is Reducing Rates

Daily Business Review


Auto insurance costs will come down slightly, more than a year after reforms aimed at reducing fraud in the state's "no-fault" auto insurance system were implemented, according to a preliminary analysis of rates by the state.

The Office of Insurance Regulation announced Wednesday that Personal Injury Protection coverage is projected to drop an average of 13.2 percent based upon on a review of 20 insurers that provide coverage for more than 75 percent of the Florida market.

The result of the decrease would be an overall 1.2 percent reduction in rates, because "no-fault" accounts for a small portion of auto coverage, the state insurance regulatory office stated in a release.

A spokesman for Chief Financial Officer Jeff Atwater, who was a proponent of the 2012 law, called the report a "positive trend" for consumers.

"PIP fraud remains a criminal activity that we are vigilantly fighting, but the positive progress being made suggests that the recent PIP reforms should be allowed to continue working to help improve Florida's auto insurance market," Atwater spokesman Chris Cate said in an email.

According to OIR, the drop is in line with the projections from legislation (HB 119) that targeted what officials said had become a $1 billion overall increase in rates due to fraud.

"The estimated average statewide savings reflect a positive trend in comparison to 2011, when 86 percent of auto filings were for proposed increases in 'no-fault' premiums—the vast majority for double digit increases," the study declared.

The report is expected to further temper efforts to dump the requirement that Floridians purchase "no-fault" coverage and instead allow them to carry just bodily injury coverage, which a vast majority of motorists in Florida already purchase.

Senate Banking and Insurance Chairman David Simmons, R-Altamonte Springs, has been moving towards such legislation, but his effort was slowed after the 1st District Court of Appeal in Tallahassee rule on Oct. 23 that a challenge to the 2012 law needed to offer a "factual" motorist who is harmed by the law.

The challenge to the law presented an acupuncturist, a chiropractor, two massage therapists, along with a hypothetical "John Doe" representing health-care providers and a hypothetical "Jane Doe" representing motorists.

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