Pip Insurance Could Continue To Receive Green Light

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TALLAHASSEE (CBSMiami/NSF) —  Florida’s Chief Financial Officer Jeff Atwater is hoping lawmakers will have more patience with a 2012 law  meant to curb fraud in Florida’s “no fault” auto insurance system

He may get his wish, as legislators don’t appear ready to change the system just yet.

While the law continues to be challenged in court, Atwater said the 2012 plan to improve the system is backed by a report released Monday by the state Office of Insurance Regulation. The report indicated that the growth of fraud in personal-injury protection, or PIP, claims has been halted.

“The Legislature, I’m hoping, will give this time and see how this is progressing, and that we would continue to see more of these players with less claims do what is the right thing and bring rates down for Floridians,” Atwater said.

The report found that since the law went into place on Jan. 1, 2013, there has been a drop in the number of personal-injury protection claims filed and dollars sought. Meanwhile, the report indicates that claims under other coverage types, such as bodily injury and uninsured motorist, have gone up.

House Insurance & Banking Chairman John Wood, R-Winter Haven, said Wednesday the state has yet to see the full impact of the law and he’d be surprised if there was “major” PIP legislation before the issue is settled in court. The annual legislative session starts in March.

“There are a lot of pending court cases that could have a lot of impact, but my understanding is we will probably not see those resolved during this session,” Wood said.

Senate Banking and Insurance Chairwoman Lizbeth Benacquisto, R-Fort Myers, said she is still reviewing the OIR report before considering any action that could change personal-injury protection coverage.

“I’m a very cautious person, and I’d like to make sure that whatever we’re doing is going to have a very positive effect on policyholders and our constituents,” Benacquisto said Wednesday.

Under the no-fault system, motorists are required to carry personal-injury protection coverage that includes $10,000 in medical benefits. Before the 2012 law was enacted, average motorists in Florida were paying $180 a year for the personal-injury protection portion of their auto coverage, according to the Office of Insurance Regulation. The state agency on Tuesday estimated the average no-fault annual payment stands around $125 a year.

The 2012 law, considered a last-ditch effort to maintain the no-fault system, set benchmarks for insurers to lower rates on coverage. It also required people involved in crashes to seek treatment within 14 days and allowed up to $10,000 in benefits for emergency medical conditions, while putting a $2,500 cap on non-emergency conditions.

Atwater and Gov. Rick Scott championed the 2012 changes, saying that fraud, primarily in the Tampa and Miami regions, had resulted in the cost of auto-insurance coverage to spike for Floridians.

The new OIR report said the average medical cost paid through PIP claims has dropped 14 percent statewide from 2011 to the first three quarters of 2014, with the average payment down 28.7 percent in South Florida in the same time. But the numbers are still considered too preliminary to show the full impact of the law.

Sen. David Simmons, an Altamonte Springs Republican who last year chaired the Senate Banking and Insurance Committee, has wanted to end no-fault, as he anticipates that courts will eventually rule against the 2012 law. Simmons remains on the committee.

Ditching no-fault for bodily injury, which provides coverage if a motorist causes an accident that hurts someone else, would put more questions of medical coverage into the courts, as injured parties would seek to recoup expenses from at-fault drivers.

Gary Farmer, of the Florida Justice Association, predicted that the law will ultimately be ruled unconstitutional as “a slew” of lower-court cases are pending about the law’s cap on benefits, which hasn’t changed since PIP was created 1979.

“The fact that the benefit amount has remained static since 1979, combined with the limitation on emergency medical care … frankly the (average) premiums should be well below the $125 mark,” Farmer said.

Last year, the Florida Supreme Court declined to hear a challenge to the law by acupuncturists and massage therapists. The issue during appeals involved whether plaintiffs had legal standing to pursue the challenge.

(The News Service of Florida’s Jim Turner contributed to this report.)

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