Florida’s Chief Financial Officer Jeff Atwater and Insurance Commissioner Kevin McCarty recently issued statements regarding the need for additional Personal Injury Protection (“PIP”) reform. Current Florida law requires personal automobile insurance to carry at least $10,000 in PIP coverage. This coverage pays for a driver’s injuries and related medical expenses regardless of who is at fault for the accident. Despite reforms made in 2007, Florida has continued to have significant issues with fraudulent claims from staged accidents that exploit PIP coverage, resulting in significant premium increases to policyholders.
Among the ideas being considered are making PIP coverage optional, adding more anti-fraud provisions, or the elimination of PIP in favor of bodily injury liability insurance. The possible elimination of PIP is most controversial. Supporters state that by moving to a system of bodily injury liability insurance, fraudulent claims will be eliminated as it requires the assignment of fault, which in turn will lead to lower premiums for consumers. Critics claim, however, that such a system is problematic as it requires litigation before the insurance is available, thus delaying payments to hospitals and other medical facilities for the treatment of those injured in automobile accidents. They also view such a move as purely cost-shifting and putting the burden on the healthcare system, which will result in higher health insurance premiums. It is anticipated that state legislators will begin introducing various bills to address Florida’s PIP issues in the next few months.