Florida Enacts Changes to Personal Injury Protection Insurance Requirements; Some Predict Savings on Premiums
The Florida Legislature passed a law, the Motor Vehicle Personal Injury Protection Insurance Act, earlier this year that purportedly reforms the requirements and procedures for personal injury protection (PIP) insurance. The law’s stated purpose is to cut down on fraud in PIP cases that was allegedly driving up costs. Most of the provisions of the new law will take effect on January 1, 2013, but some state regulators are already predicting that the law will save money for both insurers and consumers. The law imposes limits on time periods to seek treatment and on the types of compensable injuries, and consumer advocates predict a negative impact on consumers.
Florida first adopted a PIP law in 1972, according to the Insurance Journal, in order to ensure that people injured in automobile accidents had quick access to resources for medical treatment. Drivers must maintain PIP coverage as part of their auto insurance policy. Under the “no fault” PIP law, a driver’s insurer must pay up to $10,000 to its insured after an accident, regardless of who was at fault, to cover medical expenses and lost wages. The Insurance Journal claims that Florida, particularly in Miami and Tampa, leads the nation in “staged accidents.” Fraudulent PIP claims are allegedly responsible for a $1.4 billion increase in PIP costs in Florida since 2008.