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Florida’s Insurance Reform Aims to Reduce Costs and Fraud

Florida has a no-fault insurance system that is under scrutiny due to large premiums and extensive fraud, and a measure to reform the system has been passed by the legislature. If the governor signs the bill into law, Florida residents will see reduced car insurance rates, but it is unclear how long it will take for motorists to notice the changes.

The Personal Insurance Federation of Florida - made up of the insurance companies State Farm, Allstate and Progressive - hopes to make the Florida auto and homeowners insurance markets more competitive. Fox Business reports that the companies comprising the Federation insure 45% of Florida motorists. The Federation expects the new law will reduce insurance company costs.

Florida's personal injury protection law, enacted in 1971, awards $10,000 immediately to anyone injured in a car accident. Insurance companies grant the money regardless of who is at fault. The money is supposed to cover medical costs, lost wages and burial expenses. However, today the entire amount often goes for medical expenses.

According to Fox Business, companies can use the law to engage in fraud. Unnecessary medical treatments are ordered so the companies can bill the entire $10,000 amount, leaving nothing else for the insured. Under the new system, any health care practitioner who is found guilty of insurance fraud will be penalized by a five-year license suspension. Offenders also will not qualify for personal injury protection for ten years.

Under the new reform, injured Florida motorists must receive treatment within fourteen days. They can receive 80 percent of their medical costs, up to $10,000. To receive the benefit it must be determined they are suffering from an emergency medical condition. Emergency medical conditions are conditions that are reasonably expected to do one or more of the following:

- Lead to serious dysfunction of any body part or organ
- Seriously impair bodily functions
- Seriously jeopardize the patient's health

If the driver is not suffering from a serious medical condition, the coverage limit is now only $2500. Follow up care also now requires a referral, and services such as acupuncture and massage therapy are no longer reimbursed.

If you or a loved one has been involved in a car accident in Florida, speak with a personal injury attorney about holding the negligent driver responsible for his or her actions. Through a personal injury lawsuit, compensation for medical bills, lost wages, and pain and suffering can be recovered.