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New law aimed at stopping insurance fraud

Updated:

CENTRAL FLORIDA - A new law, designed to stop insurance fraud in central Florida takes effects in January.

"Floridians are paying more than they should in auto insurance because the insurance companies are paying more than they should in claims because there's so much fraud and abuse in the system," said Lynne McChristian with the Insurance Information Institute.

McChristian said Florida has more cases of personal injury protection fraud than any other state in the county and Orange County is the third-highest source of false claims in the state.

The fraud occurs when someone stages a car accident, then seeks treatment and payment for injuries they don't really have at a clinic in on the scheme.

Beginning Jan. 1, people who get in car accidents will no longer be able to file claims to pay for massages or acupuncture therapy.  Under the new law, payment for non-emergency treatment will be capped at $2500 -- down from the prior $10,000 limit -- and will only be available when referred by a physician.

"This is a measure to keep those costs in check and consumers will benefit if those measures work as they're intended," said McChristian.

She said the change will eventually save drivers money. According to McChristian, once fraudulent claims go down, so will insurance costs.

Personal injury protection makes up about 20 percent of drivers' overall insurance costs.

Floridians also pay an annual fraud tax of about $115 for a two-car family, because of so many fraudulent claims.