PIP Reform: What It May Mean to You
On October 1, the legal landscape of auto insurance changed in Florida. The reforms include the way people who have been injured in auto accidents are covered. Now they have only 14 days to begin treatment; treatment is only covered to $2,500 (instead of the previous $10,000); and treatment by massage therapists, chiropractors, and acupuncturists is no longer covered at all. These changes mean the insurance companies shoulder much less cost and for that reason, HB 119 stipulates that companies either reduce the premiums for personal injury protection (PIP) or submit to the State of Florida written explanations why their rates will not decrease.
According to the Insurance Commissioner Kevin McCarty, while the insurance companies' costs of PIP are lower now, the decrease is not enough to offset other factors that mean higher premiums. Insurer Florida Farm Bureau, for example, had been eligible for a 45% increase to the PIP portion prior to October 1, but since the law's passage, it will raise the rate by 8%.
Sen. Joe Negron, the Stuart Republican who helped lead PIP reform efforts, said, "That isn't the purpose of the law. It's complete nonsense for insurance companies to not reduce rates. We will not allow insurance companies to reap the benefits of hundreds of millions of dollars in reductions to their costs while they simultaneously deny rate reductions to consumers."
Regardless, new auto insurance rates have already been approved for several companies. Three reduced their PIP premiums by 10% or more while four will be allowed to raise PIP premiums by 3.9% to 26.3%. Dozens more companies have submitted requests to the State, but because it takes 60 days for review, it will take some time before the effects of PIP reform can be evaluated.
The insurance companies have other concerns about potential court challenges to some provisions of the new law; e.g., a coalition of massage therapists, chiropractors, and acupuncturists have filed a lawsuit against the state challenging the constitutionality of HB 119 and its limits on care providers. You may be lucky to be insured by one of the firms that will reduce your premium; but if you sustain serious injuries in a car accident, you may need more than PIP insurance to get healed.
According to the Insurance Commissioner Kevin McCarty, while the insurance companies' costs of PIP are lower now, the decrease is not enough to offset other factors that mean higher premiums. Insurer Florida Farm Bureau, for example, had been eligible for a 45% increase to the PIP portion prior to October 1, but since the law's passage, it will raise the rate by 8%.
Sen. Joe Negron, the Stuart Republican who helped lead PIP reform efforts, said, "That isn't the purpose of the law. It's complete nonsense for insurance companies to not reduce rates. We will not allow insurance companies to reap the benefits of hundreds of millions of dollars in reductions to their costs while they simultaneously deny rate reductions to consumers."
Regardless, new auto insurance rates have already been approved for several companies. Three reduced their PIP premiums by 10% or more while four will be allowed to raise PIP premiums by 3.9% to 26.3%. Dozens more companies have submitted requests to the State, but because it takes 60 days for review, it will take some time before the effects of PIP reform can be evaluated.
The insurance companies have other concerns about potential court challenges to some provisions of the new law; e.g., a coalition of massage therapists, chiropractors, and acupuncturists have filed a lawsuit against the state challenging the constitutionality of HB 119 and its limits on care providers. You may be lucky to be insured by one of the firms that will reduce your premium; but if you sustain serious injuries in a car accident, you may need more than PIP insurance to get healed.
October 6, 2012
