New PIP Law Aims to Reduce Auto Insurance Fraud And Rates

Gov. Rick Scott recently signed into a law a bill that proponents see as a victory for Florida drivers, as it is expected to reduce accident fraud and high auto insurance premiums. However, the bill is not without controversy.

The law, HB 119, affects personal injury protection (PIP) benefits for Florida motorists. Florida requires its residents to carry PIP coverage, which covers the driver’s medical bills up to $10,000 regardless of who is at fault for the car accident.

The new law aims to fight insurance fraud by banning drivers from using their PIP benefits to pay for massage and acupuncture services to treat injuries caused by a car accident. In addition, the new law limits non-emergency benefits to $2,500 and caps attorneys’ fees.

In addition to limiting benefits, the new law is also intended to reduce insurance rates. The law requires insurance companies to reduce PIP premiums by 10 percent in October and by 25 percent by 2014. If insurance companies do not make these required cuts, the law requires them to convince regulators that the rate cuts are not justified.

The changes the law makes is not without its critics. Opponents of the law say that it is a giveaway to insurance companies, because it allows insurance companies to charge for $10,000 worth of coverage while limiting their payment obligation to $2,500 in many cases. Because of this disparity, some critics are planning to file a lawsuit when the law becomes effective in January 2013 to challenge the constitutionality of the law.

In addition, critics say that the bill was hastily put together and contains conflicting language. The language in question calls into doubt insurance companies’ obligations to pay hospitals, dentists, doctors and chiropractors between July 1 and January 1, 2013.

In response to the conflicting language, the Florida Agency for Health Care Administration issued a memo saying that it considers all health care providers eligible to be paid until the new law takes effect on January 1. However, some experts have suggested that the memo may not be enough to stave off court challenges.

It remains to be seen whether the new law is constitutionally valid and will succeed in its intentions to reduce insurance fraud and auto insurance rates. In the meantime, if you are injured in a car accident, it is important to understand your rights. Contact an experienced personal injury attorney who can advise you of your rights to recover all insurance benefits that are owed to you.

Source:  World News Report

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