Florida officials, insurers demonstrate staged car crash

The following article was published in the South Florida Sun Sentinel on September 15, 2011:

 

Florida officials, insurers demostrate staged car crash

 

By Julie Patel and Danielle A. Alvarez

 

Officials call it the “panic stop.” A driver slams on the brakes and forces the car behind into a rear-end collision. Then the driver who was hit pretends to be hurt.

This type of staged accident is common in South Florida, where insurance fraud is blamed for causing everyone’s premiums to rise, officials said.

On Thursday, the Miami-Dade Police Department, Allstate Insurance and Florida Chief Financial Officer Jeff Atwater came together to educate the public on staged auto accident fraud by demonstrating the most prevalent scenarios, including the “panic stop.”

Atwater and others say that staged accidents are a big reason that Personal Injury Protection insurance premiums are rising despite a decline in reported accidents.

The insurance industry says Florida drivers each pay an additional $50 a year in insurance premiums because of fraudulent personal injury protection-related claims.

“We still have a significant element to this organized crime here in South Florida that reaches into Broward County and up into Palm Beach County,” Atwater said.

Personal injury protection, or PIP, pays medical bills for policyholders injured in auto accidents, regardless of which driver is at fault. It’s intended to protect Floridians who don’t have health insurance and to avoid lawsuits and their costs for minor injuries. Florida drivers are required to carry $10,000 worth of coverage.

“If we don’t bring it to a close, the consumer in Florida is going to start going bare, they’re going to start going without auto insurance; that’s not the answer,” Atwater said.

According to Atwater, in many cases, people are recruited by an organized group to participate in a staged accident. That person’s information is then used by clinics to charge insurance companies for procedures that are never done.

“The biggest thing that’s going on right now is that people just say that ‘this is never going to happen to me,’ but the bottom line is, it’s happening all over the place in South Florida on a daily basis,” said Justin Herndon, an Allstate spokesman.

Atwater urged citizens to call the state fraud tip hotline (800-378-0445) and report suspicious activity.

Under a state system, any referral that leads to a conviction is rewarded with up to $25,000.

Some state leaders and insurers are working on a larger scale to curb insurance fraud in Florida.

Bills proposed this year to attack fraudulent personal injury protection insurance claims weren’t approved by the Legislature because of concerns about hurting policyholders with legitimate claims, and their attorneys and doctors.

There are already two new bills filed. Sen. Mike Bennett, R-Bradenton, filed a bill, SB 254, on Wednesday that would allow insurers to give policyholders discounts for agreeing to use the insurers’ preferred doctors. Rep. Jim Boyd, R-Bradenton, has also filed a bill, HB 119, with about a dozen provisions such as expanding the reasons insurers can deny claims.

Robin Westcott, the state’s Insurance Consumer Advocate, kicked off a series of meetings Thursday to help her develop PIP fraud recommendations for lawmakers. She has assembled a panel of insurance, medical and legal industry officials, legislative and regulatory representatives and a consumer advocate to help.

Find this article here:  http://www.sun-sentinel.com/news/broward/fl-staged-crashes-demo-20110915,0,697974.story