Author Archives: Mark J. Rose, Esq.

Driving in Florida May Be Hazardous to Your Wallet, New Study Finds

You don’t want to have a car accident in Florida, according to a new study released by WalletHub last week. Their numbers ranked states on how ‘safe’ it is for drivers’ finances after an accident. The study placed Florida dead last among 50 states and the District of Columbia—which means driving in the Sunshine State can be risky to your wallet.

In producing the rankings, WalletHub looked at whether drivers had insurance and whether that insurance would be enough to cover the damages in the event of a car accident. They found significant differences between states. Specifically, the study took into account available car liability insurance to protect others, other forms of required insurance to protect drivers, and the percentage of uninsured drivers in each state.

When those three factors come together, Florida holds the dubious distinction of being the “worst state to get into a car crash,” WalletHub says. Here’s why:

  1. Insurance requirements in Florida are lower than in most other states. Florida drivers are only required to carry minimum liability coverage of $10,000 per person. The amount goes up to a $20,000 minimum for accidents involving multiple parties. By comparison, Maine and Alaska—the states ranked highest—both require $50,000 in coverage up to two people and $25,000 in property damage insurance, according to WalletHub.
  2. A high percentage of Florida drivers are uninsured. According to the study, 23.8 percent of drivers carry no auto insurance. Florida is only surpassed by Oklahoma, which has 25.9 percent uninsured drivers on the road. The best state where drivers have coverage is Massachusetts—only 3.9 percent of their drivers are uninsured
  3. Florida does not require additional forms of insurance coverage to protect drivers. Although Florida does require personal injury protection (PIP) coverage, the state does not require medical payment coverage or uninsured motorist coverage for bodily injuries or personal damage.

What can Florida drivers do? Experts recommend spending a few extra dollars to add uninsured/underinsured motorist coverage to your auto insurance policy to offer protection.

Comments Off

Filed under Insurance Fraud

Appellate Court Rules that Two Providers Not “Prevailing Insureds”

A trial court ruling awarding attorney’s fees to two medical treatment providers was reversed by the Appellate Division of the Eleventh Judicial Circuit in and for Miami-Dade County in an opinion filed January 9, 2015. The court concluded that the providers did not constitute “prevailing insureds” and therefore were not entitled to the statutory award of attorney’s fees.

Fritznel Leconte was allegedly injured in an automobile accident on July 22, 2006, while insured by a PIP insurance policy issued by United Automobile Insurance Co. He received treatment from two providers—A Rehab Associates and Med Plus Centers—and assigned his PIP claims to them. The cases were tried separately and consolidated on appeal.

In response to a pre-suit statutory Demand Letter, United determined it was responsible only for the cost of the pre-IME (Independent Medical Exam) treatments and offered A Rehab $595.20 and Med Plus $1,324.80. At trial, verdicts were returned in favor of the providers for the exact amounts offered earlier by United.

The providers filed motions for attorney’s fees as “prevailing insureds” pursuant to Florida Statutes section 627.428. That statute grants an insured the right to recover attorney’s fees when the insured obtains a judgment or decree against the insurer, i.e., is a “prevailing insured.” The question before the court was whether an insured is a “prevailing insured” when it obtains a judgment no better than the amount offered by the insurer pre-suit.

The court held that the “prevailing insured” referred to in the statute is “one who has obtained a judgment greater than any offer of settlement tendered by the insurer.” Put another way, “insureds who rejects settlement offers that would make them whole cannot seek attorney’s fees under section 627.428.”

In this case, the judgments received were not greater than the amount offered by the insurer prior to the suit, so the insureds do not qualify as “prevailing insureds” and are not entitled to attorney’s fees pursuant to section 627.428.

United Automobile Ins. Co. v. A Rehab Assoc. and United Automobile Ins. Co. v. Med Plus Centers, Case Nos. 12-413 AP, 13-148 AP, 12-381 AP, 13-147 AP (Fla. 11th Cir. January 9, 2015).

Click on the link to access the court ruling.

Comments Off

Filed under Case Law, Fla. Stat. 627.736 (2008)

Staged Accident Organizer Arrested in Orlando

A 41-year old from Orlando, who was at the center of an alleged staged vehicle accident which occurred in 2013, was recently apprehended by the Florida Division of Insurance Fraud (DIF).

Jean Severe was arrested in November for organizing the fake crash.  According to DIF, participants were sent to Florida Chiro & Rehab Center for unnecessary medical treatment of their bogus injuries.  The scheme resulted in more than $6,000 in false claims filed with insurers Allstate and GEICO.

Comments Off

Filed under Insurance Fraud

DIF Arrests Miami-Dade Staged Accident Organizer

Ismael Govea Morales was detained and arrested in Miami-Dade County for organizing two staged accidents, the Division of Insurance Fraud (DIF) reported. He was booked at the county jail in Miami in November.

DIF’s investigation found that the 49-year old recruited participants for two staged accidents occurring in June and August of 2012. Participants in the scheme were referred to clinics in Miami including Beyond Care Corp, Med Life Medical Services, Union Medical Center, Cedar Valley Medical Group, Intensive Therapy and MS Medical Rehab Corp.

The clinics then billed six different insurance carriers—Geico, Kingsway Amigo, Progressive, State Farm, United Auto, and York Services—totaling more than $167,000 in fraudulent charges as a result.

In addition, 76-year old Manuel Alvarez, one of the participants in the June 2012 fake crash, was arrested in November.

This isn’t the first time Govea has been involved in a fraudulent scheme. In January 2013, DIF arrested him on charges of insurance fraud, grand theft, money laundering, organized scheme to defraud, and making false entries on books of corporation.

At that time, Govea was charged with a total of 363 counts for his role in a sophisticated insurance fraud scheme that involved a clinic in Hialeah. Unbeknownst to the true owners of this clinic, Prudential Diagnostic Center, Govea added his name as an officer to the corporation in 2011. The clinic incorporated in 2008, but later closed in 2009.

Govea used Prudential Diagnostic Center as the conduit for defrauding insurance carriers of more than $726,000 in fraudulent billings, according to DIF. He opened a mail drop to collect insurance checks, and between January and June of 2011, Govea allegedly used the corporation to submit billings to 27 different insurance carriers for MRI services that never took place, resulting in nearly $440,000 in payments.

At first, Govea cashed about $44,000 worth of checks through a bank account he opened under the corporation name, but later switched to a check cashing store in Coral Gables to cash the vast majority of the checks.

Comments Off

Filed under Insurance Fraud

Four Essential Ways to Prepare Insurance Data for Successful Fraud Detection

Insurers are overflowing with data, but that is only part of their challenge in being able to effectively detect fraud. In terms of information, their predicament stems more from being able to tighten the amount of data to gain access to the right information sources.

A recent report by the Coalition Against Insurance Fraud indicates that more insurers are using predictive analytics and other fraud detection technology to detect and deter fraud. The survey found that 95 percent of respondents use anti-fraud technology, an increase from 88 percent in 2012. However, difficulties in data integration and poor data quality, like spelling and transposition errors, were identified as major stumbling blocks to successfully implementing these new technologies.

According to a recent article by James Ruotolo that appeared in Information Week: Insurance and Technology, consolidating data can be tricky, but addressing data quality and integration issues up front are imperative to a successful fraud analytics model and will pay significant dividends in improved detection rates.

He recommends four key steps in preparing insurance data for fraud analytics:

  1. Integrate data silos. Core processing systems serve a specific purpose that often have nothing to do with each other or aggregated data analysis. For purposes of fraud analytics, claims, policy, application, billing, and medical data sources originating in different places need to be consolidated. Be sure to include legacy systems and other less formal “systems” like spreadsheets, watch lists, case-management applications, and shared file systems. Document the integration efforts and ensure that they are repeatable and auditable. This is critical when you enable fraud analytics scoring in production.
  2. Manage missing and erroneous data. If your systems contain Social Security numbers like 999-99-9999 or claim files with missing telephone numbers, for example, then you need to fix this information. Ignoring these errors can have a negative impact on fraud analytic results. Leading data quality tools can help identify, repair, and replace missing or erroneous data. In some cases, missing data is found in another system or can be inferred based on a combination of other sources. Also, standardizing formats for common fields like addresses will be helpful in the future.
  3. Resolve entities. Once data is aggregated from multiple systems, identify whether the same individuals, companies, or other entities exist in multiple places; for example, if one system uses name and Social Security number, while another captures name and date of birth. Entity resolution techniques can link these two records and identify them as the same individual. Best results involve more advanced analytical techniques to determine the likelihood of matching, especially if social network analytics or link analysis will be used in the fraud analytics solution. The ability to link one individual—who could have roles as an insured, claimant, witness, driver, vendor, and employee across multiple claims—is a powerful tool in detecting suspicious activity.
  4. Process unstructured text. It is estimated that up to 80 percent of insurer data is kept in text format with some of the best information captured in the loss description or claim notes fields. Managing this data can be complicated because abbreviations, acronyms, industry jargon, and misspellings are common. However, a text analytics solution containing a library of terminology specially designed for insurance data can address this issue. During this analysis, additional model variables can also be created expanding the scope of fraud analytics without having to include external data sources. Machine learning and natural-language processing techniques should be used to find and create useful variables for fraud analytic modeling.

Click on the link to read the article.

Comments Off

Filed under Insurance Fraud

Third DCA Rules for Insurer in GEICO v. Gables Insurance Recovery

In an opinion issued December 10, 2014 in the case of GEICO v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), the Third District Court of Appeal quashed a Circuit Court Appellate Division’s decision affirming final judgment in favor of Gables Insurance.

Lauzan, who was insured by GEICO, was injured in an automobile accident in 2008. After obtaining medical treatment, she assigned her GEICO policy benefits to All X-Ray Diagnostic Services, which subsequently assigned the benefits to Gables Insurance.

GEICO paid less than the amount it had been billed, and Gables Insurance filed a breach of contract action against GEICO. GEICO argued that Lauzan’s $10,000 PIP benefits had been exhausted and that it therefore had no further liability to Gables.

Deciding in GEICO’s favor, the Third District Court of Appeal held that the PIP statute does not require an insurer to pay more than the $10,000 limit in PIP coverage. Further, it does not require an insurer to “set aside” funds in anticipation of litigation. The Court noted that two other District Courts of Appeal have addressed the issue, holding that a showing of bad faith or impropriety on the part of the insurer is required before it can be held liable for benefits above the statutory limit.

Quoting a recent Fourth District Court of Appeal case, Northwoods v. State Farm, the Court concluded that once PIP benefits are exhausted, “an insurer has no further liability on unresolved, pending claims, absent bad faith in the handling of the claim by the insurance company.”

The case is GEICO Indemnity Co. v. Gables Insurance Recovery (a/a/o Rita M. Lauzan), Case No. 3D13-2264 (Fla. 3rd DCA, December 10, 2014). Click on the link to read the court opinion.

The case cited is Northwoods Sports Medicine v. State Farm, 137 So. 3d 1049 (Fla. 4th DCA 2014).

Comments Off

Filed under Case Law, Fla. Stat. 627.736 (2008)

Broward Staged Accident Results in Five PIP Fraud Arrests

Five individuals were recently arrested for their involvement in an alleged staged accident that took place in Broward in July 2012, according to an announcement by Florida Chief Financial Officer Jeff Atwater.

The five, who were arrested on grand theft and insurance fraud charges, carried out the alleged scam which resulted in fraudulent Personal Injury Protection (PIP) claims costing almost $40,000. Officials say a sixth individual is associated with the crime as well but has yet to be apprehended.

Investigators with the Department of Financial Services’ Division of Insurance Fraud (DIF) said that the five participated in the alleged crash as vehicle passengers. Shortly after the accident, they sought medical treatment at several South Florida clinics for bogus injuries. GEICO, Ocean Harbor and Gainsco insurance companies received fraudulent PIP claims as a result of the scam.

Those arrested include: Alfredo Romero, 66, of Hollywood; Alice Martinez, 27, of Pembroke Pines; and Jose Rodas, 33, Whitney Lopez, 25, and Mirna Madrid, 37, all of Fort Lauderdale. Alfredo Romero was also arrested in July 2014 for his role in another Broward County staged accident.

The cases will be prosecuted by the Broward State Attorney’s Office.

Mario Ruiz, 32, of Fort Lauderdale is the sixth individual currently wanted in connection with this crime. Anyone with information regarding his whereabouts is asked to contact DIF at 1-800-378-0445 or the Broward County Sheriff’s Office. Citizens may remain anonymous.

The Department of Financial Services to date has awarded almost $349,000 to nearly 60 citizens as part of its Anti-Fraud Reward Program. The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.

Comments Off

Filed under Fla. Stat. 627.736 (2008), Insurance Fraud