FL lawmakers may get rid of PIP requirement

Posted by on Aug 18, 2011 | 0 comments

Governor Rick Scott called on lawmakers to re-examine insurance requirements for Florida drivers. All drivers must have personal insurance protection to register their vehicles. But Florida lawmakers could do away with that requirement.

Personal injury protection – or PIP as it’s called – is mandatory insurance coverage required by the state since 1972.

Florida is one of 10 states that have a no-fault system. But some say that system is being abused and they say, fix it or flush it.

Governor Rick Scott said Tuesday that reform should be a high priority in the next legislative session.

The Florida Office of Insurance Regulation released new information Tuesday showing that since 2005, the number of car crashes has decreased.

Meanwhile, since 2008, the number of PIP payments has increased by almost a billion dollars.

“I think PIP is the same in automobile as sinkhole is for property,” said Dan Dannenhauer, with Five County Insurance Agency.  Dannenhauer will help draft policy recommendations for the governor.

He says PIP now means an automatic payout of expenses – all the way up to the $10,000 limit, even if the claim shouldn’t be so much.

“You may have a $2,000 claim, but somehow you’re going to find that other $8,000 claim and once you hit the 10, now you’re going to sue,” said Dannenhauer.

He says staged accidents are the heart of the problem.

“That problem is a Dade County, Broward County, sometimes in Tampa, not often. And so many times the east coast, the southeast coast, drives our coverage,” explained Dannenhauer.

State Senator Garrett Richter sponsored a bill last session to reform PIP and stop fraud.

“By stopping the fraud, reduce premiums that are paid that our Floridians and consumers in Florida pay for their auto insurance,” said Senator Richter.

But until the legislature comes up with a plan, insurers aren’t sure how PIP reform would affect rates.

By Elizabeth Billingsley

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