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Personal Injury Protection Is Once Again On The Chopping Block

Florida’s lawmakers are attempting to repeal the mandatory personal injury protection (or PIP) portion of auto insurance, but that’s not exactly news. The question of repealing PIP has gone in front of the state congress every year for some time now, but while the government has changed the law’s regulations several times, PIP remains part of the minimum required insurance coverage for drivers.

Why PIP Exists

Personal injury protection is a kind of no-fault insurance. That means it always pays out to the person who holds the policy no matter who’s responsible. If a truck driver doesn’t stop fast enough and rear-ends you, if you wrap your sedan around a lamppost, or even if you’re a pedestrian hit by a car on a crosswalk, your PIP insurance will pay up to $10,000 of your medical bills.

The reason to have PIP and other no-fault insurance (such as workers’ compensation) is to avoid the expensive and time-consuming insurance paperwork and lawsuits that are often needed to establish fault. After all, while a damaged car can usually afford to wait to go through the full insurance process, a broken arm needs treatment right away. It also means more of the premiums you pay go towards the coverage and less towards the investigations and lawsuits that fault-based policies demand. Or at least that’s the idea.

Why PIP Is Controversial

Because PIP insurance doesn’t require investigations, and because head and neck injuries are both common in auto accidents and poorly understood even today, there’s an opportunity for fraud. Drivers can claim to be more injured than they really were in an accident. Doctors and clinics can order unnecessary tests and treatments that just so happen to add up to $10,000.

It’s hard to say exactly how much fraud takes place and how well it’s balanced by legitimate PIP claims, but the Insurance Information Institute claims no-fault fraud cost $658 million in 2011 and that the average family with two cars pays around $80 more in premiums every year. Part of the problem is that mandatory PIP insurance is relatively rare: only 15 states plus Puerto Rico and the District of Columbia require personal injury protection.

What Lawmakers Are Doing

Back in 2012, Florida passed some sweeping restrictions on PIP claims. Under the new law, you could only access the first $2,500 without issues: to get the full $10,000 of coverage you need a licensed physician to say that your injuries met certain high standards, plus the treatment needs to start soon after the collision in question. The restrictions make it harder to commit fraud, but they also make it harder for legitimately injured people to seek treatment, especially since head and neck injuries can sometimes take days to make themselves known.

So because PIP insurance is becoming hard for anyone to use and because the restrictions aren’t stopping the premiums from going up, Florida lawmakers are trying to cross PIP insurance off the list of required coverage and replace it with fault-based bodily injury coverage. It also helps that because the Affordable Care Act made health insurance mandatory across the board, PIP coverage isn’t as essential as it used to be.

PIP coverage became mandatory in the first place because the no-fault approach let insurance companies spend less on investigations and legal fees and pass the saving on in the form of cheaper premiums. However, it could turn out at this point that fault-based coverage has become the cheaper and simpler alternative because of fraud and tough anti-fraud restrictions. So if the PIP repeal doesn’t happen during this legislative session, it’ll be sure to show up again next year.

Attorney David Goldman has a strong belief that everyone should be treated fairly and those with the means should do what they can to bring justice in all areas of our society. That belief has led him to help Florida's injured from being taken advantage of by corporations and insurance companies. Since 1989 David Goldman has been fighting for the rights of Floridians both as an attorney and by personally supporting our community.

Personal Injury Protection Is Once Again On The Chopping Block

Goldman Babboni Fernandez
Murphy & Walsh

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