The state of Florida requires all licensed drivers to carry personal injury protection (PIP) insurance. This makes it one of the minority of states (15 in total, plus the District of Columbia) that use this system over the more popular liability insurance system. Because PIP insurance systems are much less common than liability systems, most people are not familiar with how they work.
Below, we’ll take a look at five things you probably didn’t know about PIP insurance.
#1: PIP Insurance Pays Regardless of Fault
The first question to be determined after an auto accident is who is responsible for it and, thus, who will pay for it. Most states use a traditional liability insurance systems. Under these types of insurance systems, the insurance company of the driver who is found to be at fault for the accident pays for the other driver’s losses. An example of the typical types of coverages used in liability systems is below:
Bodily injury protection: $25,000 per person and $50,000 per incident (if multiple people are injured)
Property damage: $10,000 per incident
Note that these are amounts that are paid by the at-fault driver’s insurance company to the non-at-fault driver who suffers injuries as a result of the accident. They provide no protection to the at-fault driver. If the at-fault driver also suffers injuries or personal property damage, his or her insurance will cover those losses through optional medical payments coverage and property damage coverage, which are normally add-ons to liability insurance.
By contrast, PIP insurance is a type of insurance that will help pay for the policyholder’s own medical costs after an accident, regardless of who was at fault for the accident. It is thus commonly known as “no-fault” insurance.
#2: It Pays for Medical Expenses for the Insured Driver
PIP insurance primarily covers damages flowing from personal injuries to the insured, such as medical expenses, lost wages, and funeral expenses. In states that use PIP systems, PIP insurance is normally required as part of a larger package of insurance coverage that includes property damage liability coverage. For example, the minimum auto insurance requirements in Florida are as follows:
Personal Injury Protection: (PIP: $10,000)
Property Damage Liability: $10,000
Under this system, each driver’s PIP coverage pays for his or her own physical injuries, while the at-fault driver’s property damage liability (PDL) coverage pays for damage to the non-at-fault driver’s vehicle.
#3: It Limits Personal Injury Suits Between Drivers
Because PIP insurance covers the policyholder without regard to fault, Florida law limits the extent to which drivers who are covered by PIP insurance can sue each other for personal injuries. If the total amount of injuries a driver suffers is less than his or her policy limits (for example, $10,000), he is prohibited from suing the at-fault driver for any additional damages like pain and suffering, mental anguish, and inconvenience, unless the injuries are considered “permanent.” Permanent injuries are defined as:
- Significant and permanent loss of an important bodily function
- Permanent injury within a reasonable degree of medical probability
- Significant and permanent scarring or disfigurement
If the total amount of injuries a driver suffers is more than his or her policy limits, however, then he or she is free to sue the at-fault driver for medical costs not covered by PIP insurance.
#4 It Keeps Many Disputes Over Liability Out of Court
One of the major disadvantages of liability insurance systems is that they require insurers to determine liability before they pay. In most cases, this is fairly simple, but for more complicated accidents can be a rather lengthy process. If there are serious disagreements as to liability between both sides, they may each hire a lawyer to represent them, and these disputes could wind up in court if they cannot be resolved through settlement offers. PIP insurance systems eliminate many of these disputes because they remove fault from the determination of which insurance company will pay for which driver’s personal injuries.
#5: It May Not be Required in Florida for Much Longer
Florida has used a PIP insurance system for nearly forty years, but many legislators in the state would like to scrap that system and revert to the more common liability system. This is mostly due to cost increases. In 2012, PIP insurance reforms were put into place that was intended to lower costs for Florida drivers by weeding out fraudulent claims. In the first two years after Governor Rick Scott signed the reforms, PIP rates from the state’s top 25 insurers dropped by an average of 14.4%. However, since 2015, rates have gone up by an average of 25.7%, an increase that the state Office of Insurance Regulation attributes to higher medical care, costs of vehicle bodywork, and an increase in distracted driving accidents.
As a result, HB 1063 was filed in February of 2017 in the Florida House to eliminate the PIP system and replace it with a liability system that would require drivers to purchase bodily injury protection instead. The bill passed the House but subsequently died in the Senate Appropriations Subcommittee on Health and Human Services. Even though HB 1063 failed, it was merely the latest in a series of efforts over the past few years to dismantle Florida’s PIP system, making its future far from certain.
Contact a St. Petersburg Personal Injury Attorney
The PIP process in Florida can be complex and confusing and it can be difficult to know how to obtain all of the compensation you need for your medical expenses and other car accident losses. Our St. Petersburg auto accident lawyers understand how to maximize your insurance claim and how to fight for your right to file a personal injury claim in court when needed. For more information about PIP insurance and how to make a claim, please contact the attorneys at the Dolman Law Group for a free consultation by calling (727) 222-6922.
Dolman Law Group
1663 1st Ave S.
St. Petersburg, FL 33712