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Proposals for Removing PIP from Auto Insurance Policies in Florida

closeup of car accident

The no-fault auto insurance system set in place in Florida may be coming to an end. Legislation as been refiled to do away with personal-injury protection coverage, requiring drivers to carry coverage for bodily injury liability.

Recently, lawmakers were told that personal-injury protection reforms have not held, in spite of Gov. Rick Scott and Chief Financial Officer Jeff Atwater being in favor of them since 2012.

Anitere Flores, Senate Banking and Insurance Chairwoman, made a statement that, before legislation passes through her committee to eliminate personal-injury protection coverage, which is also referred to as “no-fault,” she wants to know whether anything else can be done to lower rates instead of completely getting rid of the system, which is nearly 40 years old. She added that her biggest concern is that the reform efforts set forth in 2012 haven’t met expectations and that the promised amount of savings did not come.

Within the first two years after the governor signed the reform law, the rates for personal-injury protection from the 25 top insurance providers dropped an average of 14.4 percent, which was 10 percent points lower than what was expected. Additionally, rates have increased 25.7 percent since 2015, according to the state Office of Insurance Regulation. Liability coverage has also increased by 23.4 percent during the course of two years.

Sandra Starnes, director of property and casualty product review at the state Office of Insurance Regulation, reported that there have been increasing trends for all types of coverage, including PIP, since the beginning of 2015. She asserted that the increases came in the form of costs of vehicle body work, medical care, more people driving and even with the problem of distracted driving.

With the no-fault system in place, drivers would be required to carry personal-injury protection, including $10,000 in medical benefits. That total was set in 1979. A representative of the Florida Justice Association, Dale Swope, is against keeping the no-fault system and stated that benefits haven’t matched inflation over the years.

The reform law from 2012 set benchmarks for lower rates from insurers as a last resort to keep the system intact after rates increased after the growth of fraud claims. It required individuals involved in accidents to receive medical treatment within 14 days of their accident and allowed for a maximum of $10,000 in benefits toward emergency medical conditions with a cap of $2,500 on conditions not considered emergencies.

The president of Personal Insurance Federation of Florida, Michael Carlson, warned that repealing the law might result in higher premiums for everyone and that it would have a negative effect on all Florida residents.

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