New Florida Auto Insurance PIP Bill

PIP Florida BillNew legislation involving No Fault Insurance could change your premiums for better or worse. This PIP reform bill is presently aimed at getting your insurance premiums lowered; whether or not it will be effective at its aim is another thing entirely.

In 1972, Florida law began requiring drivers to carry PIP or personal injury protection coverage. This type of coverage ensures those injured in a car accident will get some monetary assistance to pay for their injuries. Currently, Florida law requires a minimum $10,000 limit, which covers policyholders for medical bills and a few other expenses up to $10,000 regardless of who’s at fault.

Over the years, PIP costs have been climbing higher and higher, largely in part due to PIP claims fraud. The most notorious cities in Florida are Tampa and Miami. These staged accidents are causing insurers to raise the rates on this kind of coverage. This reform bill is a major victory for Governor Rick Scott, as this was one of his top priorities for 2012. You can read the bill, itself, here.

So, what is new legislation going to do about it?

Drivers will be required to get treatment for their injuries within 14 days of the accident from a dentist, physician, or in a hospital. According to the Insurance Journal, under this bill, drivers will only be eligible for the full $10,000.00 limit on their policy if one of the above qualified individuals or institutions deems their case an “emergency medical condition.” If the policyholder’s situation is not deemed such, then they will only be eligible for a $2,500.00 benefit.

This is the bad, now, the good. Due to the reduced risk and financial responsibility to insurance companies in the event of a PIP fraud (and in general), PIP coverage rates are expected to go down. This translates to monthly savings for policyholders, but it is a double-edged sword. Honest policyholders will be receiving reduced coverage.

The term “emergency medical condition” is slightly ambiguous, and left to be determined by the professionals treating the injured person. In addition to this, many people are going without health insurance and rely on PIP coverage for emergency situations. Some of the injuries will not be severe enough to fall under that category, but will still need to be treated. Health care costs for the uninsured are frighteningly high.

There are mixed feelings about the new legislation, though one thing is for certain: It’s good that PIP fraud has come under scrutiny, and that a solution is being devised. Whether or not this particular solution will be effective remains to be seen. Time will tell.

If you’d like to learn more about Florida and its car insurance laws, please follow this link.

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