IRC Analysis Also Finds Growing Utilization of Expensive Diagnostic Procedures and Chiropractic Treatment
MALVERN, Penn.�Feb. 9, 2011�Almost one in every three no-fault auto insurance claims closed in
Florida in 2007 appeared to involve the exaggeration of an injury or to be inflated by unnecessary or
excessive medical treatment, according to a new study from the Insurance Research Council (IRC). In
addition, as many as one in ten no-fault claims appeared to be fraudulent, with material
misrepresentation of some or all aspects of the claim, such as claims based on fictitious accidents.
�The apparent amount of fraud and excessive billing by some health care providers in Florida is growing
rapidly,� said Elizabeth Sprinkel, senior vice president of the IRC. �Although these findings describe
conditions of more than three years ago, indications are that the situation has continued to deteriorate.�
Average no-fault claim losses per insured vehicle grew 55 percent in just the last two years, from $100
in 2008 to $155 in 2010. Claim fraud and abuse were major factors in that growth.
The IRC�s study, PIP Claiming Behavior and Claim Outcomes in Florida�s No-Fault Insurance System,
found that elements of fraud appeared in 10 percent of all no-fault auto insurance claims�known as
personal injury protection (PIP) claims�closed in 2007. Under Florida�s statewide no-fault auto
insurance system, PIP is the portion of an auto insurance policy that covers the treatment of injuries to
the driver and passengers of the policyholder�s car.
The study also revealed that 30 percent of Florida claims appear to involve either overbilling or
excessive utilization of medical services, known as claims buildup. �While this may not rise to the level
of criminal fraud, Florida�s honest drivers are essentially subsidizing unscrupulous health care providers
when instances occur,� said Sprinkel.
The study also examined utilization rates for key diagnostic procedures and treatment services in the
no-fault system. IRC found substantial increases from 2002 to 2007 in the utilization rates for magnetic
resonance imaging (from 26 percent to 33 percent), chiropractors (from 33 percent to 43 percent), and
pain clinics (from 15 percent to 27 percent).
The study is based on an analysis of 1,359 PIP no-fault claims closed with payment in 2007. An
updated analysis of PIP claims closed in 2011 is planned by IRC for later this year.
�The preliminary findings from this study confirm that Florida is a hotbed for auto insurance fraud and
that the problem has grown worse in recent years,� said Sprinkel. �We hope these findings will help
policymakers understand the specific behaviors that are driving auto insurance costs so that they can
begin to fashion effective responses to the issue.�
For more information on the study�s methodology and findings, contact David Corum, at (484) 831-
9046, or by e-mail at irc@TheInstitutes.org. Copies of the study are available at $125 for an electronic
version, or $140 for a printed copy. Visit IRC�s Web site at www.ircweb.org for more information.