Florida’s regulations have created a parasitic ecosystem that survives off of bilking insurance companies for money. These regulations encourage trial lawyers to seek damages, exaggerate claims and, in some cases, allows then collect two-and-one half times their fees – and it’s all legal. However, while insurance companies are paying for this, so are consumers.
As reported in last week’s Tampa Bay Tribune, Florida consumers face the highest property insurance rates in the company, due in large part to policies that subsidize risky behaviors, and policies that monetarily benefit special interest groups, such as trial attorneys and public adjustors, as well as encouraging fraud and exaggerated claim damages. The article specifically mentions the sinkhole fraud, estimated contribute about $1 billion to industry costs.
The problem of sinkhole fraud means that the average Florida citizen pays more for insurance, in order to support what has become a cottage industry. So rampant and blatant are these activities that we see advertising by firms seeking to profit from insurance companies. For example:
- An ad to personal injury plaintiff attorneys promising new Lumbar Loaded MRIs that would increase the clinical findings of clients seeking medical damages (The ad)
- An ad promising consumers more money for sink hole claims (The ad)
- An ad promising consumers can get a free golf cart, for repairing sinkhole. (The ad)
This parasitic economic activity creates costs which are ultimately borne by citizens. It is shameful that this activity exists, but even more shameful that it is allowed to exist.
Politicians and regulators defend these provisions as being in the consumers’ interest, but this is all about self-interest. The fact is that Florida consumers are paying disproportionately higher property insurance premiums in order to benefit political special-interest groups, fraud and a cottage industry feeds on the process.
It’s just a big consumer scam, and it needs to stop.
Steve Pociask is president of the American Consumer Institute Center for Citizen Research for more information on Florida, see www.aciflorida.org.