Updates On Personal Injury Protection (P.I.P) In Florida

Every six months, Florida automobile owners reach deep into their pockets to pay for their auto insurance, and for those with multiple drivers to insure, the expense can be horrific. Sadly, even those with excellent driving records still see their rates go up, and those who have had a few accidents, see their rates skyrocket. So all of this begs the questions, why is this happening? And, what is being done to fix it? Thankfully, by coming to the Kemp & Ruge blog, you have come to the right place for answers!

Every six months, Florida automobile owners reach deep into their pockets to pay for their auto insurance, and for those with multiple drivers to insure, the expense can be horrific. Sadly, even those with excellent driving records still see their rates go up, and those who have had a few accidents, see their rates skyrocket. So all of this begs the questions, why is this happening? And, what is being done to fix it? Thankfully, by coming to the Kemp & Ruge blog, you have come to the right place for answers!

Why Is This Happening?

For several drivers, the root cause of their ever rising bill is the Personal Injury Protection (P.I.P.) portion of their bill. P.I.P. has been around since 1971, and it was seen as a major accomplishment for the Florida Legislature. Essentially, the bill was designed to get Florida drivers’ the medical attention they needed, regardless of whether or not they caused an accident (hence, the reason P.I.P. is often referred to as “No-Fault” Coverage). In theory, the bill was fantastic! Who wouldn’t support a measure aimed at helping so many Floridians recover from wrecks?

However, it was not long before criminals found loopholes in P.I.P. to extort money from the insurance companies. For example, someone will stage a car accident, report to the police officer who arrived that he suffered several injuries, then he will go to a clinic (that is also in on the scam), and the clinic will verify all of his professed ailments. When the insurance company sends the clinic the money for his treatment, the clinician and the person who staged the accident split the insurance money, and move on to the next scam.

Also, for the insurance company, the cost of the scam is not the total cost they incur. To protect themselves, they must hire more investigators and spend more time investigating claims. Thus, there business costs have skyrocketed since P.I.P. was enacted. According to an Organized Crime and Auto Insurance report, Florida leads the nation in auto accident fraud with an estimated cost of around 1 billion dollars, and inside of Florida, Hillsborough County leads the state in auto accident fraud. Unfortunately, at this point, the auto insurers have only two choices: go bankrupt or pass the costs from the scammers to all the law abiding Florida drivers. So, now that we know why this is happening, is their any hope?

What Is Being Done To Fix It?

Thankfully, the need for P.I.P. reform has reached the ears of the Florida Legislature. Chief Financial Officer, Jeff Atwater made P.I.P. reform his biggest priority after he took office. As a result, in January the Legislature passed a P.I.P. reform bill aimed at cracking down on all the fraud claims. Some of the changes include: “treatment must begin within 14 days for an emergency medical treatment and non-emergency benefits were capped at $2,500, as opposed to $10,000.” CFO Atwater hopes these changes will curtail fraud claims and in turn drop the insurance rates overall. He insists “the entire exercise of changing law was not for the insurance industry, it was for the consumer. Rates had gone up 80% over two years.”

But, if CEO Atwater and the rest of the Florida Legislature were correct about the reforms they passed, why haven’t auto insurance rates dropped? Lynne McChristian, of the Insurance Information Institute, (funded by the insurance industry) provided the following insight “your insurance policy is a contract, and with auto insurance it’s a six month contract. So if you’re policy renewed at the end of last year, you have several months before those reforms take effect for you.” According to McChristian, it will take until July for everyone to start seeing their auto insurance rates drop.

Provided McChristian is right, Florida drivers could be celebrating July for something other than the summer and Independence Day…not-so-fast. Legal challenges to the P.I.P. reform bill have been filed, and now the bill will have to stand up to the rigors of the judicial process. With that being said, CFO Atwater is not concerned. He stands firm in his belief that the bill will be upheld, and insurance rates will drop.

If you have been in a car accident or have any other legal questions, feel free to reach out to us and call toll-free at (877) 941-4878.