Last week, a $125,000 contract was awarded to an actuarial consulting firm to study and predict what would happen if personal injury protection (PIP) was removed from Florida’s state laws. The study was proposed by the Office of Insurance Regulation, and will begin shortly. In September, the results will be presented to Florida Governor Rick Scott, the Senate president, and the House Speaker.
What does this mean? Will PIP end? What might happen if this occurs? To delve into the issue, first we have to look at PIP itself.
What Is Personal Injury Protection?
Personal injury protection (PIP) coverage is another name for Florida’s “no-fault” insurance system. We are one of a dozen states that have no-fault auto insurance laws.
These laws require all motorists in Florida to have insurance that will cover $10,000 in medical losses. While this makes ours one of the most expensive states for auto insurance, it also insures that you are covered if you are involved in an auto accident.
Basically, PIP says that if you are injured and suffer medical losses, your auto insurance will pay up to $10,000 of your medical expenses – regardless of whether you caused the accident. PIP coverage includes expenses for bodily injuries, property damage, and associated losses (i.e. lost wages, transportation, and so on). If your medical costs exceed $10,000, you have the option to increase your PIP insurance or purchase underinsured motorist coverage.
In most states, compensation doesn’t come so easily – you have to sue the other driver to receive medical benefits for your injuries.
Florida offers this option, too, but only in cases of “serious injury.” If an accident causes “serious injury,” the no-fault rule does not have to apply to your case. What does “serious injury” mean? That the accident results in death, permanent disability or scarring.
In this case, you can sue other drivers and settle in court. The judge will examine the case and any negligence involved, and the amount awarded to you or the other party is awarded based on fault. For example, if you are suing for $50,000 worth of damages and the accident is ruled to be entirely the responsibility of the other driver, you will win that entire amount. If you are found to be 50% at fault, you will only be awarded $25,000. It’s called comparative fault.
Again, to enter into this kind of settlement, the accident must result in “serious injury.” Most traffic and auto accidents are settled automatically through Florida’s no-fault system.
So why do lawmakers believe PIP is in need of reform? Rising costs and fraud. Something they last attempted to fix in 2012.
What the 2012 Reforms Did
By 2012, Florida’s auto insurance system looked a little suspicious. Even though the rate of accidents was decreasing, insurance costs were skyrocketing. And the most common bills covered by personal injury protection were massage and therapeutic exercise.
Because this, lawmakers passed reforms in 2012 in an attempt to stop the high rate of fraud. Compiled together in a law called HB119, the new rules regarding PIP are just starting to take effect.
After an accident, injured drivers have only 14 days to seek medical treatment, and treatment for injuries not directly related to the accident will not be recognized. If a driver is not sent to the emergency room for his or her injuries, they will only receive $2,500 (rather than the full $10,000) in medical benefits.
Other reforms place strict penalties on doctors who commit fraud. Insurance companies who are given fraudulent claims will not have to pay the charges until a full investigation is completed.
These reforms are expected to help PIP coverage drop by over 13% and eliminate over $1 billion in fraud. But some people still think this isn’t enough.
The Future of PIP
Opponents of PIP coverage believe that the upcoming study may show lawmakers the benefits of repealing PIP and replacing it with bodily injury liability insurance. Over 90% of Floridians already have this type of insurance.
Some lawmakers have already introduced or sponsored legislation to repeal personal injury protection. Representative Bill Hager hopes to reintroduce a bill to repeal PIP within the next year, and Senator Jeff Brandes supported legislation repealing PIP within the next four years.
Even if neither of those things happens, changes from HB119 are still being implemented. In a few months or years, personal injury protection could completely change.
If you are involved in a car accident, the new reforms could result in miscommunication and confusion between you, other drivers, and your insurance companies. Be sure to have a Florida auto accident lawyer guide you through each step of filing an insurance claim and receiving the appropriate medical benefits.
About the Author:
A partner at Lawlor, White & Murphey and a distinguished personal injury lawyer, Ben Murphey tries complex disputes that include civil appeals, maritime and admiralty claims, wrongful death, and labor disputes. Mr. Murphey has been recognized for his excellence in the area of personal injury litigation by being rewarded with a 10/10 Avvo Rating and named a Super Lawyers “Rising Star” for the last four consecutive years (2011-2014). Mr. Murphey regularly tries cases in state and federal courts around the country, being admitted to practice before all Florida courts and the United States Court of Appeals for the 11th Circuit.