State Senators representing the interest of big insurance companies and the Florida Justice Association lobbying group have once again proposed legislation that will attempt to end Florida's Personal Injury Protection coverage.
They claim it will lower premiums. They say that PIP is a fraudulent system. They maintain it will protect good drivers and punish reckless drivers.
But how much truth is there to these claims and whom would the repeal of PIP really benefit? You probably guessed it, not the constituents of Florida.
To fully understand what doing away with PIP would really mean for Florida drivers, let's first look back at why the law was created in the first place.
Before the PIP law was passed in 1972, Florida drivers who were involved in auto accidents had to wait for the insurance companies to prove the liability of their insured before they would pay out. This often led to outright denials (since proving fault can be tricky), reduced claims, and more profits for insurance companies.
This pre-PIP era resulted in auto accident victims being denied coverage for medical care since insurance companies would not pay until they had absolute proof of liability or fault. This was clearly a problem for injured Florida drivers who were going bankrupt because of simple injuries and their exorbitant out-of-pocket treatment costs.
To quell this problem, Florida lawmakers passed the Personal Injury Protection law to ensure that anyone hurt in a car accident could get the medical treatment they needed. In addition to ensuring medical coverage, the law's main goal was to ensure that accident victims received coverage to treat their injuries quickly.
In order to achieve this, the law mandated that all Florida drivers carry PIP coverage. This required insurance carriers to pay up to $10,000 to their insured after an accident to cover medical bills and lost wages—regardless of who was at fault. (This is where the term “No-fault Coverage” comes from). This allowed injured accident victims to receive immediate medical treatment without having to wait for an insurance company to unhurriedly admit or prove fault.
Since 1972, the Florida law has provided swift and virtually automatic payment to car accident victims to cover related medical expenses and lost wages. As one can imagine, insurance companies are not so fond of this, since it requires them to actually cover their clients when they are injured instead of fighting with them about every little detail.
Admittedly, it also causes some to take advantage of the nearly automatic coverage by staging accidents and reporting exaggerated injuries. It was this small minority of incidents that gave the insurance companies ammunition to have the law reformed, and it's what they're using now to try and get the law terminated for good.
In 2012, Florida lawmakers changed the requirements of PIP in order to help cut down on fraud (Read: limit legitimate claims) by requiring injured victims to be diagnosed with an Emergency Medical Condition (EMC) before they can receive the full $10,000. It also requires those who are injured to seek medical treatment within a 14-day period or else they forfeit all their coverage.
The problem with these reforms is that an “EMC” is not a real medical term. No doctor or person trained in the medical field is ever taught in medical school what they are or how to determine who does or doesn't have one. If doctors don't specifically use this term in the patient's file—which they most likely wouldn't because it's not a real thing—insurance companies can limit the compensation maximum to $2,500.
The latest round of proposed bills to end PIP have come just a few months after a study showed personal injury claims have been reduced by 17.5% and premiums have gone down by 15% over the last two years.
The new proposal to eliminate PIP would instead require Florida drivers to carry Bodily Injury (BI) liability coverage. This was the source of the problem to start with before 1972. The reason is simple: when insurance companies can deny claims over fault, many more cases go to litigation and clog up the court system. Additionally, instead of receiving the treatment they need swiftly and efficiently, BI insurance requires injured accident victims to wait around and hope they receive coverage.
This not only hurts the injured person, but it also places a heavy burden on doctors and chiropractors by creating uncertainty surrounding whether or not they will ever be paid. Not all doctors in the State of Florida can afford to spend time and money treating a patient and then waiting months or years for payment. And they shouldn't have to. If this new law goes through, eliminating PIP's medical coverage, it will highly limit the number of doctors who will be willing treat car accident victims, pushing highly qualified healthcare professionals out of the business.
Additionally, we all know that personal healthcare insurance costs are not going down; many Floridians simply cannot afford decent coverage. PIP helps to covers some of this burden by giving injured victims a viable route to treatment for their injuries and by paying doctors for their services.
Advocates of the proposed bill, like the Florida Justice Association lobbying group, claim that Florida drivers are suffering because PIP is causing insurance carriers to raise premium rates. But nobody has stopped to consider that this may not be PIP's fault, but the fault of greedy insurance companies who seek to increase profits at the expense of Florida citizens. Ending PIP would only further help them in this “profits first” campaign.
(Obviously, insurance companies are not scraping up pennies; in the past 10 years, they have seen a net income of almost a trillion dollars.)
Senate Banking and Insurance Chairwoman Anitere Flores said that before she allows this legislation to progress through her committee, she wants to know if anything else can be done to bring down rates besides just throwing the whole law out.
Her concern is well placed since rates have risen more recently (compared to going down over the last two years). On average, rates from Florida's top 25 insurers have dropped 14.4%, but since 2015, rates have gone up 25.7%, according to the state Office of Insurance Regulation [see study].
Whether this upward trend continues or it levels itself back out, PIP premiums (and auto insurance rates, in general) increase for many other reasons than “the PIP law is broken” argument takes into account. For example, the cost of medical care is rising which is one reason for insurance companies to raise their rates. Additionally, there are more people driving on Florida roads and thus more accidents to cover. And finally, the ever-busying and technologically driven society we are evolving into has caused an increase in distracted drivers, which highly contributes to the amount of accidents insurance companies must help pay for.
So, as one can see, there are plenty of reasons—besides PIP—for the raising of insurance rates; and there are plenty of reasons the termination of the law would hinder injured victims and experienced doctors.
Those who claim that consumers need relief from rising insurance premiums need not look at PIP, but the other factors presented here.
Even if PIP was repealed, not replaced with any other requirements, and consumers really did save a few dollars on their monthly premiums, the lack of personal injury protection could devastate them financially if they were to be injured and needed expensive medical care.
One must also consider that the proposed law to repeal PIP suggests that Florida drivers be required to carry other types of coverage instead. Under the new law, drivers would be mandated to carry Bodily Injury coverage (which drivers would obviously be charged for) and may be mandated to carry Medical Payment insurance (which would cost even more money). So really, the tradeoff is about equal in that drivers would still have to pay for coverage in some format—since surely insurance companies aren't going to charge less, payout more, and lose profits.
Michael Carlson, president of the Personal Insurance Federation of Florida, summed up this idea when he stated, “We do believe that any consideration of the repeal of the ‘no-fault' law should be grounded in the reality that new mandatory insurance coverages will have a price effect on Floridians.”
Take this balancing of premium costs along with the clogging of the justice system and the hindrance to skilled doctors and you have a fit argument for why PIP should not be repealed.
Florida lawmakers will hear arguments for the change in the 2017 legislative session which begins in March.
Dolman Law Group Accident Injury Lawyers, PA
Dolman Law Group Accident Injury Lawyers, PA is a personal injury law firm in the Tampa Bay–Clearwater area. Our firm was started to help those who cannot help themselves, and that's what we continue to do today. It is no secret that the goals of giant insurance companies and lobbying groups are self-serving. Any argument that the repeal of PIP is an action designed to help the consumer is ludicrous. If it helped lower costs for consumers, you can bet that insurance companies would not be supporting it. Nonetheless, whether the law passes or not, Dolman Law Group Accident Injury Lawyers, PA will continue to protect the rights of injured victims by seeking rightful compensation for their injuries. If you have been injured due to someone else's negligence and want to know your options, call us or email us to schedule a free consultation.
Dolman Law Group Accident Injury Lawyers, PA
800 North Belcher Road
Clearwater, FL 33765