In January 2013, changes to Florida laws governing personal injury protection (PIP) coverage in automobile insurance policies went into place. The law was intended to limit fraudulent insurance claims that were reportedly costing the state nearly US$1 billion annually in the form of increased insurance premium rates. Once in effect, the revised rules limited claims on PIP policies that were not brought in a timely fashion (within 14 days) of an accident. Furthermore, to receive coverage, injuries resulting from car crashes need to be treating by an accepted medical care provider like a doctor, dentist, paramedic, or chiropractor. Claims for injuries that were not treated by an acceptable provider or within the 14-day time-frame could be denied.
One year from the date when the reformed PIP rules went into place, the Florida Office of Insurance Regulation estimates that auto insurance premiums around the state should drop an average of 13.2 percent because of the decrease in fraudulent claims. Prior to the passage of the law, the National Insurance Crime Bureau had listed several Florida cities as having among the highest number of questionable PIP claims in the country.
Florida, like several other states, is a no-fault insurance state. This means that, should injuries result from a car accident, each driver’s car insurance will be responsible for his or her injuries, regardless of fault in the accident. For example, if Bill is driving his car and runs a red light, striking Jane’s car, Bill’s insurance will be responsible for covering his injuries, while Jane’s insurance will cover her injuries, even though Bill caused the accident. This is not to say that legal actions are not allowed in car accident claims, just that immediate medical care is typically funded by each driver’s PIP coverage.
Logically, the no-fault system makes sense, and it should be a relatively easy way to sort out payment issues following an injury-causing car wreck. As designed, no-fault insurance reduces delay claims by the injured policyholders and allows payment issues to be settled without the need for lawsuits. Unfortunately, there are issues related to no-fault and PIP coverage that were not easily foreseen by legislators.
Supporters of the new, stricter PIP rules say that the old system lent itself to fraud by not having sufficient time constraints on injury claims or by limiting the types of providers. They say that allowing relatively unregulated industries like acupuncture and massage therapy be counted with established, “legitimate” care providers for PIP payment purposes, and by not placing a reasonable time limit on claims, the state was all but endorsing fraudulent claims.