Tag Archives: PIP insurance

Fort Lauderdale residents arrested for PIP Fraud

The Florida Department of Financial Services’ Division of Insurance Fraud announced on March 19, 2015 the arrest of two Fort Lauderdale Residents for PIP fraud following a staged accident. Kendrick Callins and Lashaunda Gibbs were arrested for staging auto accident, patient brokering and personal injury protection insurance fraud.

The Division of Insurance Fraud, Federal Bureau of Investigation, Broward County Sheriff’s office and the Fort Lauderdale Police Department investigation revealed that Callins and Gibbs organized and participated in a staged accident on September 22, 2012, in Fort Lauderdale. The staged accident involved participants, recruited by Callins and Gibbs, who intentionally drove a rented U-Haul truck into a passenger vehicle occupied by arrestees. The arrestees submitted fraudulent insurance claims which were paid by the insurers. Callins and Gibbs each face a maximum sentence of 25 years.

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Filed under Insurance Fraud

Cape Coral Cracks Down on Drivers without Insurance

Representatives from the National Insurance Crime Bureau (NICB), the local police department, and 17 state and national auto insurance carriers conducted an insurance crackdown in Cape Coral, Fla. on Tuesday, March 17. More than 35 police officers split into three groups, all on the lookout for uninsured motorists and motorists with fraudulent insurance.

The officers pulled over speeders and drivers not wearing their seatbelts, and then checked whether they had valid proof of insurance in hand. Drivers who were stopped for speeding or being unbuckled, but had valid paperwork available, could be let go with a warning. At the end of the day, officers had given out 230 written warnings and 68 uniform traffic citations, 15 of which were for no proof of insurance.

“We try to do an operation like this at least once a year,” Cape Coral Police Department spokesman Sgt. Dana Coston said. While the officers pulled over drivers, the NICB and dozens of insurance representatives were back at the police station, working directly with the officers to verify coverage.

A common scheme, Sgt. Coston explained, is for an individual to apply for auto coverage, get the paperwork, cancel the insurance, and then use the now-invalid insurance card as proof of coverage. Officers usually have to rely on state data, which is often outdated, to verify coverage, but because officers had “real time” access to insurance representatives on Tuesday, they could confirm on the spot if the insurance coverage was valid.

Sgt. Coston was heartened by the results of the day’s work. “Seeing that [only] about 5 percent of the drivers had any type of problem when stopped today is very encouraging. That’s probably one of the highest rates of compliance we’ve seen in years.”

Coston went on to explain that, because it is likely that at least some of those ticketed will show up in court with their missing paperwork, “the rate of compliance is actually even higher than the 95 percent we saw today.”

As for those who continue to drive without insurance or with fraudulent insurance? “They’ll get caught eventually, it’s just kind of rolling the dice,” said Cape Coral Police Sergeant Jon Kulko.

Cape Coral, Fla. is located on the Gulf Coast in Lee County, just south of Fort Myers.

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Filed under Insurance Fraud

1st DCA Upholds Allstate Use of Medical Fee Schedules

In an opinion filed March 18, 2015, Florida’s First District Court of Appeal held that language in an Allstate Insurance Co. policy gave sufficient notice to an assignee of its election to use Medicare fee schedules to limit benefit reimbursements under a PIP policy. Stand-Up MRI of Tallahassee, an assignee of 14 named insureds, sued Allstate in county court, contending that Allstate’s alleged failure to give adequate notice was contrary to the Florida Supreme Court’s decision in Geico v. Virtual Imaging. The trial court agreed with Stand-Up MRI and certified a question of great public importance to the Appellate Court.

In Virtual Imaging, as here, an MRI provider had supplied services and then disputed the insurer’s authority to limit reimbursements under Medicare fee schedules. Pursuant to the Florida PIP statute, automobile insurers are required to provide PIP coverage for 80 percent of all “reasonable expenses” for medically necessary services.

The dispute here centers on whether Allstate’s policy language provided adequate notice of its election to limit reimbursements via the Medicare fee schedules or if, as Stand-Up MRI contends, the policy fails because it is ambiguous. Allstate points to the following language in the policy as having satisfied the Virtual Imaging notice requirement:

In accordance with the Florida Motor Vehicle No-Fault Law, [Allstate] will pay to or on behalf of the injured person the following benefits. . . .

Medical Expenses

Eighty percent of reasonable expenses for medically necessary … services. …

Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.

The appellate court agreed with Allstate, concluding that the policy gives sufficient notice of its election to limit reimbursements by use of the fee schedules. In making its decision, the court pointed to language in the policy stating that reimbursements “shall” be subject to the limitations of §627.736, including “all fee schedules.”

Section 627.736(5)(a) 2 refers to Medicare fee schedule-based limitations and provides that insurers “may limit reimbursement to 80 percent of the … schedule of maximum charges.” Thus, concluded the court, the notice requirement was satisfied by Allstate’s language limiting “any amounts payable” to the fee schedule-based limitations found in the statute.

Furthermore, the court also distinguished the language in Allstate’s policy from that found deficient in Virtual Imaging. There, the Florida Supreme Court concluded that Geico’s policy failed to “indicate in any way” that it intended to limit its reimbursement amounts using the fee schedules. Here, Allstate’s policy expressly limits reimbursements by “all fee schedules” in the statute, satisfying the Virtual Imaging notice requirement.

Stand-Up MRI also contended that Allstate’s use of the phrase “subject to . . . all fee schedules” fails to provide sufficient notice that reimbursements will always be limited by the fee schedules, arguing that “subject to” means only that Allstate had the option to limit reimbursements per the Medicare fee schedule , not that it would so limit reimbursements. The court, however, found no such ambiguity, stating that the language of the policy makes reimbursements subordinate to the fee schedule in “rather unmistakable terms.”

In sum, the court concluded that Allstate’s policy language gave legally sufficient notice to its insureds of its election to use the Medicare fee schedules as required by Virtual Imaging. The trial court’s decision was reversed and the case remanded for further proceedings.

The cases cited are listed below for reference.

Allstate Fire and Casualty Ins. v. Stand-Up MRI of Tallahassee, Case No. 1D14-1213, et al., 1st DCA Fla. (March 18, 2015).

Geico Gen. Ins. Co. v. Virtual Imaging Servs. Inc., 141 So. 3d 147 (Fla. 2013).

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Filed under Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"

The 11th Judicial Circuit Court Issues Key Ruling in Health Care Clinic Licensure Case

On March 10, 2015, the Eleventh Judicial Circuit in and for Miami-Dade County issued a ruling in favor of Imperial Fire & Casualty Insurance in a mandatory licensing (House Bill 119) case. The Court found that the charges submitted for Personal Injury Protection (PIP) benefits to Imperial Fire & Casualty, to be unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law.

Imperial Fire & Casualty issued a policy of automobile insurance to the Insured under which the Defendant, Magic Hands Solutions Inc. sought payment. Magic Hands Solutions operated as a medical clinic and allegedly rendered medical treatment to the Insured who was injured in an automobile accident. Subsequently, Magic Hands Solutions submitted charges for payment of PIP benefits to Imperial Fire & Casualty. Magic Hands Solutions was advised that the claim submitted for PIP benefits was not payable because the clinic was not properly licensed pursuant to Section 627.736, Florida Statutes (2013).

In 2012, the Legislature required mandatory licensing for all clinics holding an exempt status, whether by issuance of Certificate of Exemption or self-determined, in order for clinics to receive reimbursement pursuant to the “PIP Statute.” Hence, a clinic must be licensed under Part X, Chapter 400 to receive reimbursement for PIP benefits, unless it qualifies for an exception listed in Section 627.736(5)(h).

The Court found that the Magic Hands Solutions being wholly owned by a license massage therapist does not qualify for any of the exceptions delineated in §627.736(5)(h)(1)-(6) and was required to obtain a Health Care Clinic license as a condition precedent to receiving reimbursement of PIP benefits.

As a result of Magic Hands Solutions’ failure to obtain a Health Care Clinic License, the Court found that the charges submitted were unlawful and thus, noncompensable pursuant to Florida’s Motor Vehicle No-Fault Law and that Imperial Fire & Casualty.

Imperial Fire & Casualty Insurance Company vs. Magic Hands Solution Inc., Case No. 2014-2211 CC 24 (01) (Fla. 11th Circuit March 10, 2015).

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Filed under Fla. Stat. 627.736 (2008)

GEICO Prevails on Appeal in Case Involving $50K Typo

Bernadette Ryan was involved in a car accident in 2013 and sued her insurer, GEICO, based on the uninsured/underinsured motorist portion of her insurance policy. A rejected, pre-trial Proposal for Settlement for the $50,000 policy maximum stated that Ryan wanted:

“One Hundred Thousand Dollars ($50,000) inclusive of all costs and fees and in full and final settlement of all pending claims. The total amount of this settlement shall not exceed $50,000.”

The case proceeded to trial and the jury awarded Ryan $195,739.81. Because her damages award was more than 25% greater than the offer in the rejected Proposal for Settlement, Ryan filed a motion to tax costs and a motion to tax attorney’s fees pursuant to Florida Statute 768.79.

Noting the inconsistent dollar amounts in Ryan’s settlement document, GEICO argued at the hearing that the document was patently ambiguous. Ryan, on the other hand, insisted that GEICO knew “exactly what the proposal was for.”

Circuit Judge Dale Ross, while agreeing that confusion existed, nonetheless sided with Ryan and ruled that the “shall not exceed” clause cleared up the confusion. The judge then entered an order granting Ryan’s motions for attorney’s fees and to tax costs. GEICO appealed that order.

The Fourth District Court of Appeal agreed with GEICO that the Proposal for Settlement was ambiguous and unenforceable and the trial court erred in enforcing it. The court therefore reversed the trial judge’s decision, saying, “The trial judge had no basis in law or fact to conclude otherwise.”

Click on the link to read the ruling of the Fourth District Court of Appeal.

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Filed under Case Law

Google Compare Auto Insurance Launches in California

As reported earlier in FLPIPGuide.com, recent rumors about Google entering the U.S. auto insurance market have proven to be true as the tech giant recently announced its launch of Google Compare Auto Insurance in California. A roll-out in more states is planned.

According to a recent article in Insurance Journal, Google calls its online price-comparison service a “seamless, intuitive experience for connecting with your customers online.”

A company-issued news release said, “Whether you’re a national insurance provider or one local to California, people searching for car insurance on their phone or computer can find you along with an apples-to-apples comparison of other providers all in as little as 5 minutes.”

The Mountain View, Calif.-based company indicates that participation in Google Compare is based on a flexible cost-per-acquisition model.  Payment is not a factor in ranking or eligibility, according to Google.

The Google Compare Auto Insurance portal is user-friendly, and lists a variety of carriers, including Mercury and MetLife, who are partners in the project. Californians simply enter their zip code to bring up a form that asks for basic information such as name and date of birth. There is also a “speed things up” autofill feature, especially convenient to those on Google’s Chrome browser. Visitors to the site are self-directed through screens, eventually resulting in quotes for auto insurance.

Google Compare Auto Insurance Services Inc. has been licensed to sell insurance in at least 26 states and could reportedly be working with CoverHound, which currently offers online quotes for multiple insurers including Hartford, esurance, 21st Century, Travelers, Safeco, National General, Progressive, Foremost, Plymouth Rock and others, Insurance Journal said.

The company intends to introduce ratings and reviews, as well as local agent support for providers with agent networks.

Google’s entry into the insurance market, along with its role in building autonomous vehicles, could make it a dominant player in the field. William R. Berkley, CEO of W.R. Berkley Corp., revealed in a management seminar presentation to independent agents in January that “Google has the capacity to change auto insurance” because of the competitive advantage it gained when the company invested a significant amount of money to “actively build a rule-road map of America.”

An article in TechCrunch reported that several major insurance carriers may be taking a wait-and-see approach, however.

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Filed under Uncategorized

Auto Insurers Warn that Driverless Cars May Affect Profitability

While driverless cars could be hitting the roads in as little as five years from now, many auto insurers are worried about the far-reaching implications this autonomous technology could have on their industry’s bottom line. According to the Insurance Information Institute (III), the industry brought in $107.4 billion in passenger-car auto insurance premiums in 2013, the latest year for which figures are available.

In a March 3rd Wall Street Journal article, “The Driverless Car, Officially, Is a Risk,” it was reported that three insurance suppliers as well as an auto parts manufacturer have already cautioned investors in their most recent annual reports that the dawn of the self-driving vehicle and its technology may greatly affect their business model in the future.

Companies usually regard their annual report’s risk-factor disclosures as a place to point out potential difficulties and disruptions and to protect against their liability—not as a prediction of what’s to come. But the fact that driverless cars have been mentioned in several annual reports is telling.

According to the WSJ article, Cincinnati Financial Corp., which produces about a quarter of its premiums from commercial and consumer auto policies, warned its forecasts could be flawed due to “Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products.”

In addition, Mercury General Corp. said that “the advent of driverless cars and usage-based insurance could materially alter the way that automobile insurance is marketed, priced, and underwritten.” The company provides most of its auto coverage in California.

Industry analysts believe a variety of consequences could result by taking the driver out of the equation:

  • Insurers may sell fewer individual policies
  • Insurers may have to cover fewer accidents
  • Technologically-advanced cars may cost more to repair
  • Some of the expense from consumer auto insurance may shift to commercial liability policies as more automakers and software firms face litigation for accidents
  • Larger policyholders could have more bargaining power than many small ones, potentially putting more pressure on premium revenue

The Insurance Information Institute also addressed this topic on its website. According to the III’s recently-updated report, driverless cars are viewed by the organization as one natural outgrowth from a multitude of advances in safety technology.

Numerous developers of driverless cars are concerned that regulatory matters and costs could delay their launches to market, but in any event, these technologies are still moving forward.

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Filed under Fla. Stat. 627.736 (2012)