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Tuesday, October 16, 2018

The ABC’s of PIP Insurance


By Catherine Powell

Image courtesy of wikimedia
For the uninitiated, PIP stands for personal injury protection.  In Florida PIP pays for 80% of your medical bills and 60% of your lost wages caused by an auto accident, up to a maximum of $10,000.  As such, it’s one of the few provisions of your auto insurance policy that’s paid regardless of who is at fault or whether you are on foot or riding a bicycle.  This means if you carry auto insurance in Florida and are involved in an auto accident in any way, shape or form, you could be eligible to receive benefits.  That’s the good news. 

The bad news is $10,000 doesn’t amount to a heck of a lot when it comes to medical expenses.  Even worse is the fact that if your injury isn’t considered an emergency, the maximum amount of benefits you can claim is $2,500.  Still, it’s better than nothing, right?  There is also a death benefit that kicks in if you are killed in an auto accident.  That pays your next of kin $5,000 to help defray the cost of funeral expenses.

How do you file a PIP claim?

If you hope to receive any reimbursement by filing a PIP claim in Florida, you’re required to file within two weeks of the auto accident. If you wait and file late, your claim will be automatically rejected.  I know this seems kind of callous when you consider the fact that depending upon the severity of the injuries sustained in a car crash, you could be incapacitated for more than two weeks.  Still, the law is inflexible when it comes to the amount of time you have to file a PIP claim.
In addition to submitting receipts for medical treatment from a physician, osteopath, chiropractor, dentist, physician’s assistant, or registered nurse, you also need to have your employer submit a wage and salary verification if you wish to be reimbursed for lost wages. This record needs to document your wages for the 13-weeks prior to your accident.  Last but not least, you’re required to get a note from your physician detailing why you were unable to work after your accident.

How long can the insurance company keep me waiting for a reimbursement?

Image courtesy of Max Pixel
The good news is that your insurer has only 30-days to pay up, provided you have provided the proper documentation in a timely manner.  The bad news is that the insurer has up to 60-days to investigate any PIP claim. 

The reason the insurance companies are given such latitude when it comes to dealing with PIP claims comes down to one word: Fraud.  During the period of 2010-2012, the Florida Office of Insurance Regulation claimed that fraudulent claims cost insurers in Florida more than $1 billion.  We’re not talking about nickel and dime claims either.  Some of the criminals involved fleeced the insurance companies out of millions of dollars, as you will see below in an October 6, 2017 article from the South Florida Business Journal.

Six South Floridians charged in multimillion-dollar insurance fraud
Two South Florida residents have been charged in a scheme that allegedly paid tow truck drivers to solicit accident victims for chiropractic treatments they did not need, prosecutors said.
According to an indictment unsealed by the U.S. Attorney's Office in Miami on Wednesday, Felix Filenger, 41, of Sunny Isles, and Andrew Rubinstein, 48, of Miami, headed a criminal enterprise that used a dozen chiropractic clinics to engage in automobile insurance fraud.

According to federal prosecutors, the pair allegedly used licensed chiropractors as nominee owners to obtain licensing for clinics, then paid kickbacks ranging from $500 to $2,100 a person to tow truck employees to refer accident victims. The clinics would "treat patients based solely on a profit motive and without regard to patient health,'' acting U.S. Attorney Benjamin G. Greenberg said in a release.
Altogether, prosecutors charged six people in the case. In addition to Filenger and Rubinstein, Olga Spivak, 59, of Hollywood, and Linda Varisco, 55, of Coral Springs were charged for allegedly filing false statements with insurance companies claiming they were 100 percent owners of clinics that were, in fact, owned by Filenger and Rubinstein.

Image courtesy of Picpedia
The worst part is that fraud like this cost all Florida motorists.  Since 2017, PIP rates in Florida have increased by more than 50%. The reason? Florida PIP claims the same year rose by nearly 50% to more than 60,000.

Another reason for the surge in PIP claims is third-parties suing for compensation.  It’s what’s known in the industry as Assignment of Benefits (AOB).  The Florida Justice Reform Institute reported that more than half the state’s insurance litigation is not being brought by individuals but by auto repair centers, chiropractors, image centers and other medical providers. 

The Palm Beach Post reported in May 2018, It happens when third parties like a repair contractor or medical clinic tell consumers we’ll handle the claim for you if you sign this form assigning us the insurance benefit. It’s not uncommon in health care and other fields. Insurers say the trouble is, Florida’s laws provide too many incentives for some of the third parties take the insurers to court. The net effect: drivers keep paying rising premiums to insurers. A state-commissioned actuarial report said drivers could save up to $81 per car if Florida repealed PIP and required bodily-injury liability coverage.   

An even more prevalent form of fraud occurs by people who are paid to stage accidents and fake injuries to fraudulently collect PIP benefits.   If you’re involved in any auto accident, no matter how minor, make sure you file a police report, as well as getting the names and addresses of the driver and all passengers in the other vehicle.  This action could save you and the rest of the driving public in Florida from getting popped by PIP fraud.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save on liability insurance, check out her website at  http://liabilityinsuranceorangeparkfl.com/


2 comments:

  1. Insurance fraud affects every driver in Florida. It's practically a cottage industry in South Florida.

    ReplyDelete
  2. I did not know all of these things about PIP. Now I do. Thanks.

    ReplyDelete

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