Q. My auto insurance premium keeps rising though I haven't had any accidents recently. I live in Florida. What gives?
A. According to the insurance industry, you live in a state that leads the nation in staged auto accidents. Excessive medical claims and costs arising from this kind of fraud, insurers say, are costing you and other drivers big money.
Fraud and abuse will add about $1 billion to the cost of Florida's auto insurance system this year, reports the Insurance Information Institute, an industry group. By its calculation, this will mean about $100 more a year in premiums for a typical two-car family.
Florida is one of 12 states that have a no-fault car insurance system. In case of an accident, your insurance company pays your medical costs up to your policy limits regardless of who was at fault. Other drivers involved get the same from their own insurance policies. The law limits the rights of drivers to sue each other, which avoids expensive litigation over the cause of an accident.
Supporters say no-fault insurance protects drivers in regions with high numbers of uninsured motorists. Another cited benefit is that medical bills are paid automatically and fewer drivers and insurance companies wind up in court trying to prove who was to blame.
(There are exceptions, though — most states, including Florida, allow victims to sue if damages exceed a certain level, if the act was malicious or if injuries sustained are permanent.)
Critics of no-fault laws, which include the insurance industry, say that lack of court scrutiny creates an environment friendly to fraud, which leads to higher premiums. The system, they say, also protects bad drivers by preventing them from being sued for the damage they cause.
Earlier this month, legislation that would clamp down on staged accident crime rings was introduced in the Florida Senate. A related bill is under consideration in the legislature's other chamber, the House of Representatives.
New York, which also has no-fault insurance, has similar problems with fraud. The state insurance department said that nearly nine in 10 suspected health care fraud cases last year resulted from no-fault auto injury claims. The department recently proposed tightening regulations to give insurers more tools to fight fraudulent claims.
Carole Fleck is a senior editor at the AARP Bulletin.