Late last week, the state legislature agreed to a much debated revamp of Florida's no-fault car insurance law intended to cut down on fraudulent claims and the spike in insurance premiums they cause Sunshine State drivers.
Personal Injury Protection (PIP) is designed to quickly provide benefits for a person injured in an automobile accident, regardless of fault. Florida drivers must carry a minimum of $10,000 in PIP coverage, which provides payment for medical, wage loss and death benefits resulting from an accident. The system also limits an insured person's right to sue for non-economic losses such as pain and suffering.
In a 22-17 vote, the state senate passed a PIP reform bill (HB 119) on Friday night. The Tampa Bay Times' Tia Mitchell reports that "[t]his new iteration of no-fault car insurance still requires $10,000 in minimum coverage, which can be used by people who are seriously injured in car accidents. But people with moderate or "soft-tissue" injuries can collect only $2,500 in benefits." It will also force insurance companies to recalculate rates due to potential cost savings at an expected rate of 10 percent.
While the number of reported Florida car accidents continues to drop overall, PIP claims - and insurance premiums - have risen in recent years. The state Office of Insurance Regulation reported in April that the number of PIP claims increased 26% to 386,464 statewide in 2010. In South Florida, PIP claims skyrocketed by 48%, with the region's insurers paying out more than $1 billion in claims.
Officials say the rise in claims is in part due to staged accidents. Perpetrators also often work with sham clinics to charge insurance companies for medical exams and procedures that simply never happen. In December, a pair of Miami women were arrested and charged with insurance fraud, racketeering, grand theft, patient brokering, organized scheme to defraud and operating an unlicensed clinic for their roles in an alleged accident staging scheme.