PIP reform on/off switch back on—for now
In 2012, changes were made to Florida’s No-Fault Auto insurance law, also known as Personal Injury Protection (PIP). Those changes were set to launch in January 2013, yet the law barely left the parking lot.
In March, a group of medical providers affected by the way the new law paid out benefits filed a court injunction to block it. In October, Florida’s First District Court of Appeals reversed the injunction, and the changes finally got ignition. The medical providers countered by requesting a rehearing, which was turned down by the appeals court this week.
Yes, it’s hard to keep up with the traffic that is PIP reform. Throughout the law’s 42-year lifespan, it’s had a number of tune-ups; many legislative initiatives were made to fight the fraud that seems attached to the $10,000 PIP benefit, an enticing “bag of money” for fraudsters.
So, reforms set to start in January never did. Yet, the nearly year-long delay and the on-again/off-again volleying have brought more attention to the fraud problems within the PIP system, and that is attention fraudsters don’t like. They are also getting continued attention from the Florida Division of Insurance Fraud (DIF). DIF had a 31 percent increase in PIP-related arrests this year, according to its annual report.
Reforms or not, this spotlight alone on auto insurance fraud may help curb auto insurance claims costs, which would be good news for Florida drivers. The high cost of auto claims is what drives the cost of insurance, and for some auto insurers, claims costs are starting to decline. It’s a good sign, but the fact is that PIP costs had nowhere else to go but down as the average cost of a claim has been suspiciously bumping the $10,000 PIP ceiling. While not every auto insurance company is experiencing a declining auto claims trend, due to the 11-month stall on the law, some are – and that’s welcome news.
Keeping the high-beam headlights on PIP fraud is working. Shine on!