Florida Enacts Auto Insurance Reform


On March 9, 2012, the state of Florida enacted a major reform to its no-fault auto insurance law in an effort to stop rampant abuse of personal injury protection cases, a veritable cottage industry for fraud that has led to exorbitant coverage rates for Florida drivers.

The PIP law, which dates to 1972, was created to guarantee that anyone suffering injuries in a car crash would quickly receive the funds needed for treatment of their injuries. Insurers were required to pay up to $10,000 for medical expenses and lost wages in the wake of an accident regardless of which driver was at fault.

Since 2008, PIP costs in the state have shot up by a staggering $1.4 billion in the face of an epidemic of fraudulent, staged accidents, especially in the areas around Tampa and Miami. In fact, more staged car crashes occur in Florida than in any other state in the nation.

New Legislation Limits PIP Benefits

The new legislation requires that a driver involved in an accident seek treatment within 14 days either in an emergency vehicle like an ambulance, or in a hospital. The treatment must be administered by a medical, osteopathic, or chiropractic physician, or a dentist.

The injured party will only receive the $10,000 PIP benefit if one of those professionals, a physicians assistant, or an advanced registered nurse practitioner determines that an “emergency medical” condition exists. If that certification is not obtained, the PIP benefit will be only $2,500.

Follow-up care and services will require the referral of a doctor, osteopath, chiropractor, or dentist. Neither massage or acupuncture therapies will be covered by PIP benefits.

Critics Decry Benefit to Insurers

Critics, like Florida Consumer Action Network spokesman Bill newton say that the measure’s real effect will simply be to benefit insurers themselves. “Floridians are in for a rude awakening,” he said, “Instead of measures aimed at preventing true fraud, we’re left with a bill that pads the pockets of big insurance companies.”

Senate President Mike Haridopolos admitted passage required calling in some favors. “I was focused on getting PIP passed and delivering those votes to the governor,” he said . “When I had to call in a couple of favors today on a tough vote that will lower the cost on auto insurance, some people on the fence said, ‘you know what Mike, I’m going to give you this vote.”’

Florida Governor Rick Scott, who has made PIP reform his signature issue for this session of the legislature, sent hand-written thank you note to the 23 senators and 80 state representatives who voted in favor of the PIP reform. The principle architect of the bill in the Senate, Sen. Joe Negron said, “I think it’ll make a big difference in cutting down on fraud.”

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