Car Insurance Premiums Are Rising Due to Fraud No Fault Policy AARP Bulletin
Car Insurance Premiums Are Rising Due to Fraud; No-Fault Policy - AARP Bulletin
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, on staged accident crime rings was introduced in the Florida Senate. 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. Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures
Ballooning Car Insurance Costs
In Florida fraud adds $1 billion a year to drivers' premiums industry says
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 insurers say, are costing you and other drivers big money. Juan Manuel Silva/age fotostock Fraud and abuse will add about $1 billion to the cost of Florida's auto insurance system this year, reports the , 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.Related
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, on staged accident crime rings was introduced in the Florida Senate. 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. Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures