NEW PIP LEGISLATION SIGNED INTO LAW FRIDAY
Gov. Rick Scott on Friday signed a law aimed at cutting down on what he called "an epidemic of car insurance fraud in Florida". Re-writing Florida's PIP law was one of Gov. Scott's priorities in the 2012 legislative session. Gov. Scott said, "This legislation will benefit the pocketbooks of every Florida family who drives an automobile".
According to Gov. Scott, Florida's $10,000 PIP benefit has led to widespread abuse, staged car accidents and phony injuries that have sent insurance premiums skyrocketing to a level that many people can no longer afford. It was alleged that the two biggest areas for fraud in the state are Tampa and Miami.
Under the new law, accident victims must be treated within 14 days, starting Jan. 1. Benefits will no longer pay for acupuncture and massage therapy, which state lawmakers decided were not medically necessary.
Most parts of the law take effect July 1, including stricter licensing of medical clinics, more use of long-form crash reports and stiffer penalties for providers who commit fraud. Judges can review attorneys' fees to ensure they are not excessive.
THE REAL INCENTIVE TO THE INSURANCE COMPANIES
Only people with emergency medical conditions can receive the full $10,000 PIP benefit. Others will be eligible for $2,500 in treatment, which is designed to cut down on the range of treatments victims receive.
Gov. Scott called PIP fraud a "billion-dollar tax" on Florida motorists. He and Chief Financial Officer Jeff Atwater aggressively pushed for passage of an anti-fraud measure but the bill sponsored by Rep. Jim Boyd, R-Bradenton, almost didn't happen. It narrowly passed the Senate on a 22-17 vote.
WILL THIS NEW BILL SAVE CONSUMERS MONEY?
It is uncertain whether the new PIP bill will save consumers any money. I checked out my insurance bill and my PIP insurance portion costs me about $363 per year per for PIP. If I experience a premium savings of 10% as promised in the new law, I will save $36 per year. In exchange for this savings I potentially give up $7500 in PIP benefits after an automobile accident. This math simply does not add up to a savings for me, but would be a huge benefit to the insurance companies.
The logic behind the bill was that accident victims can turn to their health insurance (if they have it) or to the at fault drivers liability insurance (if he or she has it). Unfortunately what the legislature failed to acknowledge is that Florida, unlike other states does not require drivers to carry mandatory liability coverage also known as BI (Bodily Injury Liability Coverage). Cutting out 75% of PIP benefits with the expectation that injured drivers can collect from other sources makes no sense unless the legislature had added a requirement that drivers carry mandatory BI coverage. At the present time, drivers are only required to carry PIP (personal injury protection) and PD (Property Damage) which covers damage to the other car only, not injury to persons. Mandatory BI was proposed during the discussion of the new PIP law, but the legislature voted against mandatory BI.
WHY DID WE HAVE PIP IN THE FIRST PLACE?
It is possible that the Florida Legislature lost sight of the reason we have PIP? The personal injury protection (PIP) law was adopted in 1972 to make sure anyone injured in an auto accident would quickly get money to treat their injuries. The legislation provided that a driver’s insurance company pay up to $10,000 to cover medical bills and lost wages after an accident, no matter who is at fault.
The public policy in support of having PIP is expressed in Florida Statute Section 627.737 Tort exemption; limitation on right to damages. The intent was to limit injury lawsuits in Florida to the extent of personal injury protection benefits paid. The statute reads as follows:
627.737 Tort exemption: "Every owner, registrant, operator, or occupant of a motor vehicle with respect to which security has been provided as required by ss. 627.730-627.7405, and every person or organization legally responsible for her or his acts or omissions, is hereby exempted from tort liability for damages because of bodily injury, sickness, or disease arising out of the ownership, operation, maintenance, or use of such motor vehicle in this state to the extent that the benefits described in s. 627.736(1) are payable for such injury, or would be payable but for any exclusion authorized by ss. 627.730-627.7405, under any insurance policy or other method of security complying with the requirements of s. 627.733, or by an owner personally liable under s. 627.733 for the payment of such benefits, unless a person is entitled to maintain an action for pain, suffering, mental anguish, and inconvenience for such injury under the provisions of subsection (2)."
The need for this exemption, and the PIP statute is based upon the fact that Florida does not require mandatory bodily injury liability insurance. Florida is a No Fault State. Everyone with auto insurance (not including motorcycle policies) is required to carry PIP (Personal Injury Protection). It typically covers 80% of your medical bills and 60% of your lost wages up to $10,000.00. You can buy medical payments coverage to fill in the 20% gap and you can also buy extended PIP coverage. If you want to save money, you can get wage exclusions on the PIP or a PIP deductible.
FLORIDA DOES NOT REQUIRE DRIVERS TO CARRY LIABILITY INSURANCE
What most people aren't aware of is that BI (bodily injury) coverage is not mandatory in Florida so someone can hit you with "full coverage" and be without BI coverage. Mandatory BI coverage is required in many states, but not in Florida. So "full coverage" equals PIP and Property Damage.
A much needed amendment to the new 2012 PIP bill was proposed during this session that would have added mandatory BI (bodily injury coverage) in Florida, however that amendment was shot down. The insurance company lobby prevailed again, as they would prefer not to have mandatory BI coverage in this state, and now have successfully limited PIP coverage with the new bill passed last Friday evening. Perhaps the legislature has lost sight of the needs of the people of Florida, as well as the intent of the PIP staute, and corresponding limitation of liability, and handed the insurance industry a nice gift for 2012 at the expense of the citizens of this state.
So I say, let the PIP fraud games begin. Already some PIP clinics may be looking for ways to circumvent the new PIP law recently passed in the Florida Legislature. One way that might seem like a good idea is to have a physician, osteopathic physician, a supervised physician's assistant or advanced registered nurse practitioner on staff at your PIP accident clinic. That way, one of these licensed professionals can make the determination that an emergency medical condition exists with an auto accident victim, and as such the PIP clinic will be entitled to the entire $10,000.00 in PIP benefits. While this may seem enticing to some, it could be opening the door to allegations of PIP fraud if the majority of people that appear at a particular PIP clinic all have an "emergency medical condition" as determined by a staff person at the clinic.
I for one foresee a great deal of litigation over the new PIP law, and a great opportunity for the insurance companies to make more money, pay less benefits, and flat out deny benefits to Florida drivers.
If this bill saves consumers even the promised 10% off their PIP bill I would be quite surprised.My guess is that the insurance companies will inform Tallahassee that they were not able to cut rates as promised, but thanks for the legislation anyway.
For more information or for a free consultation, contact Scott and Fenderson, PA Injury and Family Law Attorneys, by calling 727-321-0099 or view our web site www.scottandfenderson.com