PIP Fraud…It’s Premise!

No-Fault isn’t just besieged by fraud, it is a fraud. That’s one take from a paper  titled “The Fraud of No-fault” written by Sean Fowler, a 27 year claims veteran and Assistant Vice President of Claims for the IAT Insurance Group.  And, it’s the missing argument in the four decades old PIP debate.

I don’t want to put word’s in Fowler’s mouth, but…he’s just one of many industry insiders who read my last post, and who seem to agree that those carriers and policymakers arguing to keep No-fault under the flawed mantra of “give the reforms a chance to work!” may be just a little disingenuous.

For insurer’s, it’s not that they can’t see the lessons of the past, it’s that they can’t see past their current balance sheet.

For “some” elected officials, it’s a bit more complicated.


“The true reason the legislature keeps trying to repair what they cannot fix is that with No-Fault they created a large pool of funds for distribution to special interests.”

Of course, insurer lobbyists know this.  They know, too, that their clients addiction to short term profits is so acute they can’t (or won’t) devote resources to address Florida’s onerous bad faith climate, which is the real cost driver. And, that’s OK with lawmakers who don’t want election year stress between two powerful special interest groups on an even more controversial battlefield.

Lawmakers realize PIP reform has never (that’s never) worked–not once in forty years. They’re merely trying to appease as many groups as they can by supporting yet another set of reforms. But, if you were to remove from the equation the influence of a few myopic insurance organizations, it’s possible lawmaker’s would’ve repealed No-Fault years ago.

Despite a traditional coziness with trial lawyers, the media is starting to see the light.

After supporting the 2012 reforms, Palm Beach Post editor Randy Schultz said “Florida should junk the [No-Fault] system”

He saw the 1st DCA’s decision for what it was, not what he wanted it to be.  Unlike one industry trade contends Schultz said the decision “strongly hinted that key portions of the law might be unconstitutional…It’s a clunker”   (See NOTE #1 below)

Many insurer’s agree.

After supporting the 2012 reforms, the American Insurance Association (AIA), the largest and oldest insurer trade organization in America, representing the majority of Florida’s PIP premiums said…

“…we continue to believe that Florida’s consumers and the insurance marketplace would be best served by repealing  no-fault and replacing it with a fault-based system.  

In a recent editorial, State Senator David Simmons, Chairman of the Senate Banking & Insurance Committee called No-fault” a “disaster”.  Like Fowler, Schultz and virtually everyone I’ve talked to, (and many I have not) Senator Simmons recognizes No-Fault can’t be reformed.

“…It’s premised on the faulty theory that all people are honest and no one will figure out that PIP permits a dishonest motorist to recover $10,000 by simply saying that he or she hurts.”

The problem is the premise. The only way to repair a flawed premise is to repeal it.

Perhaps the most convincing testament in support of repeal is that trial lawyers staunchly favor reform–in essence supporting a system they spent millions to defeat because it restricted access to their services.

The only piece I read critical of Senator Simmons editorial appears to be from a trial lawyer:

Senator Confused About Real PIP Fraud

I just finished reading the piece by State Sen. David Simmons and am embarrassed for him and this great state. How is it that the chairman of the Senate Banking and Insurance Committee knows nothing about insurance. He states that over 70 percent of Floridians have purchased bodily injury insurance because they feel PIP is inadequate. This makes zero sense.

PIP covers a person for his own injuries. Bodily Injury protects you for injuries you negligently cause to others. To imply that they are substitutes for each other highlights the ineptitude of our elected officials, as well as the slanted agenda Sen. Simmons has in getting rid of a valuable PIP system at the behest of Big Insurance.

Also, where are the real PIP fraud numbers? Saying that the number of fraud claims is “widely agreed” further perpetuates the Rick Scott agenda of making claims with no real proof.  (emphasis added)

The real fraud in PIP today is being committed by the insurance companies, who, despite losing their cases in the Florida Supreme Court, still refuse to pay Florida’s insureds and small businesses the monies they are owed.

For those unfortunate enough to get into an accident, trying to get property damage paid or medical bills reimbursed becomes a full-time job. It is time for David Simmons to refocus his attention on the real PIP fraud purveyor, Big Insurance.

Martin Berger, Miami      

Berger may be more confused than he claims Senator Simmons is.  Inexplicably, he demeans Governor Scott who supports the trial bar’s position against repeal and who is one of only two statewide officials that could cause repeal to occur–especially if someone pushed him with ill-advised insults.  Please, Mr. Berger, keep it up!

Bottom line: forty years of failed reforms prove you can’t fix a faulty premise.

Florida’s nearly 16 million licensed drivers deserve a fresh start!


NOTE #1: Post subscriber, David Schindler, said No-fault is “disgraceful” and called it a “Cash Cow”...

“Why else do so many law firms advertise, incessantly, to call them if you were involved in an auto accident: 1-800-GOT-ACHES; 1-800-GET-MONEY; 1-800- CASH-IN-NOW. “If we don’t get you tons of money, it costs you nothing.” “Injured in an auto accident? See me before you see your doctor.” 

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  1. herbie wiles says:

    I appreciate your articles and the time necessary to give us information. No Fault is a gift to the Lawyers and a loss to the insurance companies and in the long run an expense to the consumer.

  2. You’re right Herbie, and obviously…I agree. It’s often frustrating to hear policymakers opine about lowering rates, whether property or auto, then to watch them resist doing what they “know” will actually solve the problem. American politics…too bad. Have a happy New year! 🙂

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