Florida lawmakers this spring are slated to consider whether it would be worthwhile to forego the decades-old no-fault car insurance requirements that have been mandated since the 1970s. If legislators decide to repeal that provision of the law that compels drivers to carry a minimum of $10,000 in personal injury protection (PIP) benefits, supporters of the law say the average driver is going to save about $81 on their policy. Given that according to a recent study by the Federal Insurance Office, the state has one of the highest rates of uninsured motorists and has about 3 million people living in areas where auto insurance is not affordable, that could be a big deal. However, it wouldn’t be without risk.
The primary question raised by detractors is whether the $80 in savings would be negligible if there is an increase in costs associated with more lawsuits that arise from car accidents and losses suffered by health care providers who would need to treat crash victims who don’t have health insurance or PIP benefits.
The purpose of PIP benefits are to ensure that people who are injured in a crash have some base level of coverage for medical bills if they are injured in a traffic accident, no matter whose fault it was. The problem is that despite a number of measures intended to lower losses from fraud, PIP rates have spiked in recent years. They went up 14.5 percent just between 2013 and 2014, and then up another 26 percent in 2015 and 2016.
The Office of Insurance Regulation says there are a few things happening here. The first is that health care treatment costs have increased. Secondly, there has been an alarming uptick of car accidents in Florida and across the country. The National Highway Traffic Safety Administration reports the number of fatal accidents rose 8 percent in the first nine months of 2016 as compared to the same time window in 2015.
Meanwhile, drivers in Florida paid the fifth-highest average car insurance bills in the country in 2014. The newest FIO report indicates it now pays the second-highest, with far more people affected than in the state in the No. 1 slot, Oklahoma.
Most states as of right now are known as “tort states” when it comes to motor vehicle accidents. That is, the costs for property damage, medical treatment, pain and suffering and lost wages is covered by the at-fault driver. However, that only happens upon negotiation with that individual’s insurance company or, in cases involving a serious crash, a lawsuit. In fact, the whole purpose of requiring PIP benefits was to drive down legal costs.
If the state does repeal the requirement to carry PIP benefits, it’s plausible there could be a requirement for motorists to carry bodily injury liability insurance, as all but one of the 38 tort states currently do. But of course that raises the question of how much drivers are actually going to save. Some of those who are supportive of repealing the law say the bodily injury liability coverage should be set at $25,000 per person and $50,000 per occurrence.
State health care providers are opposed to the law, fearing that hospitals providing treatment after a car accident to some 2.6 million Floridians who also don’t have health insurance will be too great a tax on the system.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Lawmakers to weigh costs, benefits of no-fault insurance repeal, Jan. 24, 2017, By Ron Hurtibise, Sun Sentinel
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