Category Archives: Fla. Stat. 627.736 (2012)

11th Circuit Appellate Division Rules Insurer’s Adjuster Notes not Discoverable

On January 5, 2015, the Appellate Division of the Eleventh Judicial Circuit in and for Miami-Dade County issued a ruling reversing the lower court’s order compelling production of the insurer’s pre-litigation documents.  The court held that such documents are not discoverable in a first-party coverage lawsuit between the insured and the insurer.

In 2011, respondent Yesenia Romero sued State Farm for PIP benefits, alleging State Farm breached the insurance contract and violated the Florida PIP statute in not paying for claims resulting from a 2009 motor vehicle accident. Romero filed a request for State Farm’s “entire claims file concerning the case,” including all of the adjuster’s notes made prior to the pre-suit demand letter.  State Farm objected to the production, asserting work-product privilege.

A hearing on the issue was held in the trial court.  Following an in camera inspection of the adjuster’s notes, the judge determined that they were not protected under the work-product doctrine because they were not prepared in anticipation of litigation.  The court ordered State Farm to produce all the adjuster’s notes.  State Farm sought to have the appellate division quash the order.

In its analysis, the appellate division noted that all three levels of Florida’s judiciary, including its own court, have said that an insurance company’s claims file documents are not discoverable in a first-party coverage and damages lawsuit between an insurer and the insured. The court cited a Third District case, Castle Key v. Benitez, in concluding that “where the insured is not seeking a bad faith claim, but rather seeks relief for breach of contract,” the insurer’s claims file documents are not discoverable.

In this case, where the plaintiff was alleging breach of contract and not bad faith, the appellate division determined that the trial court erred in ordering State Farm to produce the documents and therefore quashed the trials court’s order.

State Farm v. Yesenia Romero, Case No. 13-48 AP (Fla. 11th Circuit January 5, 2015).

Castle Key Ins. Co. v. Benitez, 124 So. 3d 379 (Fla. 3d DCA 2013).

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Filed under Case Law, Fla. Stat. 627.736 (2012)

Google May Be on the Verge of Selling Auto Insurance in the U.S.

There has been much speculation of late surrounding Google and whether the online giant will soon be entering the U.S. auto insurance market to sell policies online. The tech giant is expected to facilitate insurance sales from existing insurers, in a role similar to that of an insurance agent, rather than becoming an actual insurance company.

Google has been offering online auto insurance in the United Kingdom for the past two years via Google Compare (google.co.uk), which also enables users to comparison shop for credit card offers, travel insurance and mortgages, according to an Insurance Journal article on January 9.

The signs have certainly been pointing in that direction, the article said.

  1. A post in the New York Times technology blog ‘Bits’ reported that Google entered a partnership with CompareNow.com, a site which compares auto insurance quotes from fully licensed insurance providers. On-site users, who fill out one simple form, can then buy a policy online, by phone or through a local agent.
  2. Another indication recently came from Forrester Research analyst Ellen Carney who said in her blog that Google’s online auto insurance shopper—Google Compare Auto Insurance Services Inc.—has been licensed to sell insurance in at least 26 states with authorized carriers including Dairyland, MetLife, Mercury, Permanent General Assurance, Viking Insurance, and Workmen’s.
  3. Carney reported that Google may also be working with CoverHound, a site that provides online quotes for numerous insurance companies including Hartford, esurance, 21st Century, Travelers, Safeco, National General, Progressive, Foremost, Plymouth Rock, and more.

She also believes a launch could happen later this quarter, starting in California, and rolling out to Illinois, Pennsylvania and Texas, even though the pilot program has supposedly been delayed before.

Despite results from a survey by TransUnion last year that found online shopping for auto insurance rates declined about 3 percent in the 12 months ending February 2014 compared to a year earlier, industry analysts believe that Google could still make a dent in the market.

Global research by Accenture found that 67 percent of insurance customers said they would consider buying insurance products from organizations other than the insurers themselves.  In addition, 23 percent indicated that they would consider buying from online service providers such as Google and Amazon.

Google Inc. does own GoogleCompare.com; however, the site is not operational, according to Insurance Journal.  The publication also received no response from Google as expected. The tech company has previously told Reuters and the Wall Street Journal that it does not comment on speculation.

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Filed under Fla. Stat. 627.736 (2012)

Legislators Unlikely to Change Florida’s No-Fault Auto Insurance Law Right Now

Chief Financial Officer Jeff Atwater wants Florida’s legislators to continue to be patient before considering any rash actions that would change personal injury protection (PIP) coverage in the state. That’s because a recent report released by the state Office of Insurance Regulation (OIR) shows that increases in fraudulent PIP claims have basically been stopped.

The Florida Department of Financial Services is attributing these results to the passage HB 119, effective January 1, 2013, which created some exclusions for coverage under PIP insurance and limited for non-emergency conditions. The amended No-Fault Law excluded PIP reimbursements to massage therapists and acupuncturists, and also required individuals involved in car crashes to seek treatment within 14 days of a motor vehicle accident. PIP allows up to $10,000 in benefits for emergency medical conditions, but places a $2,500 cap on non-emergency conditions. It is mandatory for all Florida drivers to carry PIP.

According to a story in the Sun-Sentinel on January 7, the law set benchmarks for insurance carriers to lower rates. The OIR report showed that from 2011 through September 2014, the average medical cost paid through PIP claims dropped 14 percent statewide.  In South Florida, a hotspot of fraudulent PIP activity, the average payment decreased 28.7 percent, the article reported.

However, it is thought that these numbers are too preliminary and do not show the full impact of the law, yet.

House Insurance & Banking Chairman John Wood, R-Winter Haven, noted in the article that he would be “surprised if there was ‘major’ PIP legislation before the issue is settled in court.”

Senate Banking and Insurance Chairwoman Lizbeth Benacquisto, R-Fort Myers, said that she is still reviewing the OIR report, and likes to ensure that if changes are made, they have “a very positive effect on policyholders and our constituents.”

The annual legislative session begins in March.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Will Florida’s Reported Drop in PIP Fraud Continue?

Florida, one of 12 states with no-fault auto insurance, has reported its fair share of insurance fraud, mostly through scams involving Personal Injury Protection. PIP insurance provides personal injury protection up to $10,000 in immediate medical coverage without having to establish fault in the court system.

As industry insiders know, this monetary level is often seen as an easy target by fraudsters. Even though PIP premiums have represented only about 2 percent of all of Florida’s collected insurance premiums, they account for nearly half of all auto insurance fraud referrals, the Florida Office of Insurance Regulation (FOIR) has established.

But all of that may be changing, the National Insurance Crime Bureau believes, as auto insurance fraud has actually dropped in Florida since a 2012 law reformed PIP. As we posted on our FL PIP Guide this past March, tighter legislation, enhanced public awareness, and coordinated law enforcement efforts appear to be having a positive effect on PIP fraud in Florida.

These changes specifically include stronger penalties for medical providers who commit PIP fraud, a 14-day window for accident victims to seek medical treatment, and reduced benefits and treatments.

In line with projections made when HB119 was passed, FOIR expects PIP coverage rates to decrease by an average of 13.2 percent, reducing auto insurance rates 1.2 percent overall, according to figures based on a review of data from 20 insurers that provide auto insurance to more than 75 percent of the Florida market.

However, because PIP coverage savings will still be relatively small in comparison to the overall total cost of a typical auto insurance policy, and because fraud is at times difficult to detect, the next few years may be a better indication of whether these changes have produced a statistical blip in the numbers or a longer-term trend.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Operation Sledgehammer Finds Three Chiropractors Guilty of PIP Fraud

A federal jury has convicted one West Palm Beach chiropractor and two Miami chiropractors for their roles in a massive staged automobile accident scheme, following a seven-week trial in U.S. District Court for the Southern District of Florida.

Using the U.S. mail in a scheme involving Personal Injury Protection (PIP) payments, defendants were found guilty of defrauding insurance companies through mail fraud and money laundering.

Kenneth Karow, 54, of West Palm Beach, Hermann J. Diehl, 44, of Miami, and Hal Mark Kreitman, 50, of Miami Beach were all convicted on multiple counts. Karow was sentenced to 11 years in prison, Diehl to nine years, and Kreitman to eight years for the fraud scheme that ran from October 2006 through December 2012.

The fraud was perpetuated in several ways across 21 chiropractic clinics, according to a release issued by the U.S. Attorneys’ Office for the Southern District of Florida. Key elements of the scheme are outlined below.

  1. Licensed chiropractors were recruited to serve as the “named owners” of chiropractic clinics, in circumvention of Florida licensing requirements, with others actually in financial control of the business.
  2. Recruiters were used to attract real or fake auto accident victims who were fraudulently treated at the chiropractic clinics for injuries.
  3. False chiropractic treatment claims where then billed to insurance carriers.
  4. No co-pays or deductibles were collected from the “patients,” and this fact was not disclosed to the insurance companies.
  5. The money received from this scheme was then used to pay recruiters and participants and to enrich members of the conspiracy.

The prosecution is the latest in a series of charges that have been part of a four year investigation into the massive conspiracy. The joint federal and state investigation, known as Operation Sledgehammer, has resulted in charges against 93 defendants for their roles in the organization. Of these 93 defendants, 57 have been charged by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to defrauded insurance companies.

Click on the link to read the full release.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

Defendant’s Motion to Dismiss Granted with Prejudice in PIP Benefits Case Involving Challenge to “Emergency Medical Condition” (EMC) Provision

In a second ruling within one week involving Florida’s amended PIP law, the U.S. District Court for the Southern District of Florida dismissed a case challenging reimbursement under the amended statute’s “emergency medical condition” or “EMC” provision. See our earlier post titled Court Grants Defendant’s Motion to Dismiss in Robbins v. Garrison P & C.

Sendy Enivert sued her auto insurance company, Progressive Select, alleging breach of contract for failing to pay her PIP benefits to a limit of $10,000. Enivert’s claim involved the newly added provision to Florida’s PIP law which limits PIP benefits depending on whether a claimant has suffered an emergency medical condition.

Plaintiff Enivert interpreted this language to mean that an insured is limited to $2,500 only if a medical provider determines that there is no emergency medical condition. She argued that because, in her case, no medical provider ever made such a determination, she was entitled to the full $10,000. In other words, because no medical provider determined that she did not have an emergency medical condition, she was entitled to full benefits.

Defendant Progressive read the statute to mean the opposite, i.e., that a medical provider must affirmatively determine that an emergency medical condition does exist in order for the insured to be eligible for reimbursement of the full amount.

The court agreed with Progressive, concluding that the PIP statute clearly indicates that a determination that a claimant has suffered an emergency medical condition is required in order to receive benefits in excess of the $2,500 limit. Since a medical provider did not determine that Enivert had an emergency medical condition, she was not entitled to the full $10,000 in benefits.

The court also looked to the legislative intent behind the PIP statute. It concluded that the clear legislative intent was to decrease PIP fraud by placing more stringent requirements in order to receive the maximum amount of benefits.

Based on the above, the court granted Progressive’s motion to dismiss Enivert’s case.

The case is Sendy Enivert v. Progressive Select Insurance Co., Civil Action No. 14-CV-80279-Ryskamp/Hopkins (S.D. Fla. July 23, 2014). Click on the link to read the court ruling.

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Filed under Case Law, Fla. Stat. 627.736 (2012)

Court Grants Defendant’s Motion to Dismiss in Robbins v. Garrison P & C

On July 18, the U.S. District Court for the Southern District of Florida dismissed a case in which the plaintiff challenged reimbursement under the amended statute’s “emergency medical condition” (“EMC”) provision.

Glenaan Robbins sued her auto insurer, Garrison P&C Insurance Co., alleging that Garrison violated the 2013 provision of Florida’s PIP law that limits PIP benefits depending on a determination of whether or not the claimant suffered an emergency medical condition.

Robbins sustained injuries in an April 2013 car accident. She was treated for her injuries and alleged that ultimately “no determination was made that she did not have an emergency medical condition.” When Robbins submitted her claim to her insurer Garrison, Garrison limited her reimbursement to $2,500.

FL PIP law requires that an insurance company must reimburse its injured insured up to $10,000 if certain medical providers determine that the injured person had an emergency medical condition. Reimbursement is limited to $2,500 if a provider determines that the injured person did not have an emergency medical condition.

In this case, no determination was made either way that an emergency medical condition did or did not exist. Plaintiff Robbins argued that where there has been no such determination, insurance companies must reimburse medical expenses up to $10,000. In other words, unless a determination of no emergency medical condition is made, the plaintiff is entitled to the higher amount.

Reviewing the language of the statute and legislative intent, however, the court concluded that Robbins’ argument had no merit. Rather, where there has been no determination of an emergency medical condition made, PIP medical benefits are not to exceed $2,500. Thus, contrary to Robbins’ argument, the conclusion of the court was that unless there is a determination of an emergency condition, the reimbursement is limited to $2,500.

The court therefore held that Robbins had failed to allege a statutory claim and her case was dismissed.

The case is Glenaan Robbins v. Garrison Property & Casualty Insurance Co., Civil Action No. 13-81259-Civ-Scola (S.D. Fla. July 18, 2014). Click on the link to read the court ruling.

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Filed under Case Law, Fla. Stat. 627.736 (2012)