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Here's the scenario. There must be fraud because insurance companies are losing money. Really, how about they are losing money because they are not making any money on their investments. The insurance industry has a great gig. They have been telling Governors that fraud is the reason rates are so high that even well educated people are willing to bite off on it.

Insurance lesson 101. I have an insurance company that sells Personal Injury Protection in Florida. It's a hypothetical – I don't own an insurance company. I take in premiums from policyholders. I invest the premiums. I re-insure the losses so that other insurance companies share in the risk when there are claims. I used to make 5% to 10% even more on my investments. Now I don't. Losses come in. In the old days I could make money even if losses exceeded my premiums because I did well on the investments. Today I can't.

Here's what just happened in Florida. Governor Rick Scott signs a law that is supposed to stamp out fraud in the state's no fault insurance plan. Ultimately what he did is allow insurance companies to charge you more for a product that no longer has the same benefits. Of course, it doesn't matter to him because no insurance company in their right mind would deny his claim.

Standard bet is that claims will begin to be denied on a massive basis in Florida. Much easier to deny a claim than pay it if the Governor will allow you use the word fraud every time you deny something.

Note to Governor Scott – Insurance rates will never go down as long as you empower insurance companies to rely upon your misguided thinking. It just will not happen.

Only in a country where people have died to give rights to those that live in this great country do we allow big rich corporations to take away those same rights. Unbelievable.

Get how stupid part of this new law is. If you don't go to the emergency room within 14 days of the wreck, you are not entitled to the full amount of the insurance benefit. You just told everyone, in order to make sure you are 100% covered by insurance, go to the emergency room even if you think you are not hurt. I guarantee there are a lot more people that in the past turned down treatment than those that engaged in fraud – and the difference in the number of innocent injured is a heck of a lot bigger than those who stage accidents.

Do you know anyone that stages a wreck with their car to get $10,000.00. I know a few who might but even they aren't dumb enough to really do it.

If you want to follow this story, please follow the Consumer Action Network. Bill Newton, the executive director, hit the nail on the head when he said the new law will shift the burden of proof from insurance companies to innocent victims and will ultimately allow insurance companies more ways to avoid paying claims from these innocent victims.

Drive Safe – X THA TXT

Say No to Distracted Driving

Jeff Weinstein, Dallas injury lawyer


  1. Gravatar for ForThe People

    Mr. Weinstein, your article is spot-on. My only comment is that your statement that "claims will begin to be denied on a massive basis in Florida" is not exactly accurate. Claims are already denied on a massive basis in Florida and have been for years, and PIP claimants routinely are tied up in court for years on end. What the new statute will do is allow insurers to deny ALL PIP claims in Florida, while simultaneously collecting mandatory premiums in exchange for NOTHING. Governor Scott and his legislature cronies should be in jail for perpetrating government sanctioned fraud on all Floridians.

  2. Gravatar for Jeff Weinstein

    For the People - thanks for the comment. You are absolutely right. ALL CLAIMS! Very sad.

  3. Jeff: Great post, but nothing new. Here's the scenario: Citizens who think lower taxes will result from voting Republican, elect a Republican governor and legislature. These campaigns are financed, privately, thanks to our Republican Supreme Court majority, by corporate goliaths. These new Republican legislators owe corporate interests, big time, for financing their campaigns. They shove "tort reform" down our unsuspecting throats. They limit damage recoveries. They make benefits worthless and premiums rise. The public has less and less and the corporations have more and more. But, hey, we pay less taxes, right? We are sacrificing our civil rights on the alter of corporate greed and now we face a possible Romney presidency. This is really scary, folks. Wake up and vote against these bastards before you become one of their many victims. Kudos to you, Jeff, for exposing this fraud in Florida. Regards, Mark

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