Is Florida also headed toward an auto insurance crisis?

Auto insurance - Crisis coming to Florida

The state is already teetering on the edge in its property coverage sector, but are vehicles next?

Florida has long contended with challenges in its auto insurance industry due to the way the laws in the state open the door to fraud and widespread litigation, both of which are highly costly to insurers and, therefore, to drivers who must pay higher premiums every month.

Among the issues driving this problem include the activities of certain glass repair shops and lawyers.

A recent The Washington Post report has pointed to a group of lawyers and glass repair shops that have been taking advantage of Floridian auto insurance law loopholes in order to benefit from payouts worth millions of dollars. These behaviors have become highly costly to the coverage industry and have been pushing rates higher in a market where drivers are already paying some of the highest premiums in the country.

Auto insurance - Glass repair of car windshield

Legislators in Florida are now seeking to put this trend to a stop.

The issue has to do with lawyers and employees from glass repairs shops seeking out vehicles with damaged windshields. They tend to look in car washes and parking lots. As an incentive to the vehicle owners, they offer gifts such as free meals, gift cards, or even discounted hot tubs.

Auto insurance companies refer to the instigators of these schemes as “harvesters”.property tax appeal course

The strategy of the harvesters is to offer a free windshield replacement to the vehicle owner because it is included in comprehensive coverage. All the drivers must do is sign off on it. Once the driver provides a signature and receives the free repair, the glass shop issues a massive claim to the insurer. The insurer will frequently either pay only a portion of that amount or will deny it outright.

From that point, the glass repair shops bring in their lawyers, who sue the insurers for both the payment of the claim and the cost of legal fees, frequently settling lawsuits in batches of dozens or even hundreds at once, at which time the insurer pays a considerable amount at once.

Auto insurance companies have said that this practice is forcing them to set their rates substantially higher, and according to the report, consumer advocates agree.

In conclusion, Florida’s auto insurance industry is grappling with substantial challenges due to fraudulent practices. The exploitation of legal loopholes by a group of lawyers and glass repair shops has led to a surge in litigation and insurance claims that are inflating premiums for drivers. The state’s legislators are now striving to curb this trend, but the repercussions of these activities are already being felt by consumers who bear the brunt of higher insurance costs. According to the Insurance Information Institute, an estimated 10-15% of all auto insurance claims are fraudulent, highlighting the gravity of the problem at hand. It is crucial that stringent measures be implemented to address this issue and safeguard the interests of honest drivers.

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