Tale of 2 town hall meetings: Home vs. Auto Insurance
Within two weeks’ time, two town hall meetings were held in Tampa related to insurance. One got a lot of attention from the media and the public, while the other not so much. In mid-September, at least 250 people came to voice concern over proposed sinkhole rate increases for Citizens Property Insurance. Last week, a town hall meeting was held to hear the public voice on rising auto insurance rates, and about 75 people showed up. Considering that both sinkhole AND auto insurance rates are rising by nearly the same amounts in parts of Florida, this difference in attendance is curious.
Of course, attendance at the sinkhole hearing was fueled by Citizens’ rate indications that showed a statewide increase of more than 2,000 percent for Tampa. That, obviously, got attention and fueled panic. Now that regulators have weighed in, the sinkhole rate increase for Hillsborough County will be around $100 annually, and three to four times more than that for Hernando and Pasco. Auto insurance rates are rising within those same parameters, so I wonder why there seems to be less concern – given the lower turnout at the Auto Insurance Fraud Summit in Tampa last Wednesday.
Most of the attendees at the auto insurance summit were small-business owners of independent insurance agencies, not the general public. So, it was primarily a “preaching to the choir” event. Insurance agency owners know painfully well that rampant fraud is impacting the no-fault auto insurance system. Fewer companies want to sell auto insurance in areas where they are paying out more in claims than they are collecting in premium. (This should sound familiar, since that’s what has happened with property insurance.) For the employees and owners of small insurance agencies, companies leaving the market mean fewer options for customers and, ultimately, fewer customers. Chris Foley is an owner of an insurance agency considering closing up shop in Hillsborough County. He spoke at the summit, expressing concern that rising auto insurance costs may cause more people to go without coverage altogether. Foley is a member of the Fraud Alert Team, which was instrumental in helping to get a Hillsborough County ordinance passed to combat fraudulent insurance claims. The ordinance may be a model for other municipalities combating a rise in unlicensed medical facilities that portend to treat accident victims, but are merely a mechanism to bill insurers for suspect or inflated services.
Foley’s belief that rising auto rates will make people simply stop paying for coverage is scary. It’s against the law to drive without insurance, and Florida already has high numbers of uninsured motorists. This problem is getting attention to determine what is driving up auto insurance costs and to drive them down. The state’s Division of Insurance Fraud (DIF) blames criminal activity with organized fraud rings participating in staged accidents. Then, the crooks send people with alleged injuries to phony clinics for phony treatment. DIF’s annual report shows nearly half of all the referrals it receives for investigation are related to auto insurance fraud. Another research bulletin says costs are higher because medical procedures in Florida cost more than other states. Florida’s Office of the Insurance Consumer Advocate is looking into all this. There is a PIP Working Group comprised of nearly two dozen people looking to reverse the trend of rising auto rates. I’m a member of the group and invite you to look at the website for all the meeting materials and presentations.
There is another Auto Insurance Fraud Summit in Miami on Oct. 11 from 6:30 to 8:30 p.m. at the University of Miami Fieldhouse. It’s in the Multipurpose Room.