Tallahassee, Florida - Rampant fraud in Florida's personal injury protection system is costing Floridians hundreds of millions of dollars on their car insurance premiums, according to a new report and that's angering state leaders.
They agree the system is broken and is unfairly costing consumers extra money.
Florida Chief Financial Officer Jeff Atwater puts it like this: "We owe it to them to either fix it or flush it. Start looking at the alternative."
Florida's no-fault system requires every driver to have $10,000 of PIP insurance for medical bills and lost wages of people injured in your vehicle.
The report finds premiums have gone through the roof as a result of fraud and abuse in Florida.
Consider this: the price of PIP insurance for a 40-year-old woman in Tampa with a perfect driving record has doubled from $284 to $572 a year since 2005. For a 25-year-old man in Tampa, premiums have skyrocketed from $340 to $629 a year.
It makes no sense considering the frequency of crashes is down in Florida, but PIP payments are up 70 percent in just the last two years.
Florida Insurance Commissioner Kevin McCarty says fraudsters have figured out how to take advantage of the system and a solution has been elusive.
"It's like whack a mole. You close it down one place and it pops up somewhere else. They're very proficient at finding those weaknesses."
Florida enacted its no-fault PIP law in 1972. At the time, the concept seemed to make a lot of sense. The system was designed to reduce litigation and provide payments to medical providers a lot faster.
But McCarty says rip-off artists have exploited the system and millions of good drivers in Florida are paying the price.
"Your rates are going up astronomically not necessarily because other people are legitimately getting paid, but because there's a group of people fraudsters and hucksters, who have perfected the system of finding the weak points and taking advantage of that."
The problem has been particularly bad in South Florida for years, but now the abuses are spreading statewide. McCarty reports Tampa now leads the state in the number of staged accidents.
CFO Atwater says state leaders must figure out a way to fix the system because consumers are bearing the brunt of the problem.
"You can't keep throwing consumers to the wolves. That's what's happening here. They have to buy it and we're the ones choosing to allow an environment to exist where all this fraud continues to be perpetrated on the people of Florida."
Gov. Rick Scott compares the soaring PIP premiums to a tax on Floridians.
"That's a tax on our citizens. If we could do the right thing on that, it would reduce the cost of living in our state."
Scott is directing McCarty to come up with a fix-it plan that state lawmakers can approve next spring.
"There's legislation that they've tried to pass over the past few years. I'm looking for him to come back with what his recommendation is on something that can get passed with the legislature."
Florida is one of 10 states with a personal injury protection insurance system. Thirty-eight states use a traditional tort system in which courts determine which driver is at fault and liable for damages.
Dave Heller