When your car insurance is your biggest monthly expense, something’s off.
This is unfortunately the case for many Floridians, who are paying the third highest premiums for car insurance in the country — only residents in Louisiana and Wyoming pay more. The average car insurance premium in 2018 was $2,050.
Why? What has caused car insurance premiums in Florida to skyrocket?
Some point to the high number of motorists who are uninsured, while others point to the many tourists who come to the state and cause accidents.
But, in fact, the main reason for this rise in car insurance premiums is PIP.
What is PIP?
PIP, which stands for Personal Injury Protection, is best described as a “no fault” insurance coverage. No matter who’s at fault in an auto accident in Florida, the driver’s own insurance coverage pays toward medical bills and lost wages up to $10,000. This is an effort to give victims of the accident quick relief instead of having to wait for a lengthy investigation to wrap up.
Around 40 years ago, Florida made it mandatory for drivers to have PIP coverage, which accounts for up to 20 percent of the cost of automobile policies in the state. The amount that drivers in Florida pay yearly towards PIP premiums is $3.5 billion.
The downside of PIP is that fraud is committed each year to the tune of about $1 billion.
And guess who gets stuck paying for it? Yep, all of us.
You’ve probably heard of the scam.
Drivers or pedestrians intentionally cause another driver to bump into them with their carefully choreographed “accident” plan. Then they cash in. Rinse and repeat.
This type of PIP fraud has been going on for quite a while, and has contributed to the rising costs of the insurance.
Florida Governor Rick Scott pushed to reform PIP in 2012. Some measures taken prohibited massage therapy and acupuncture treatment in PIP cases. Limits were also put on care from a chiropractor, and a limit of $2,500 was put on emergency care costs. Plus victims had to get medical care within 14 days after the accident.
For a time afterwards, PIP premiums began to drop. Unfortunately, the industry decided to raise other premiums to make up for their loss in revenue, putting the issue back at square one.
If you have questions about PIP insurance or have been injured in an accident, you need experienced Florida personal injury lawyers to answer your questions or guide you through the process of getting the compensation you deserve.