Nearly 50 years ago, Florida's Personal Injury Protection (PIP) system was born. Hyped as a way to sidestep lawsuits in minor accidents, PIP's primary objective was to reduce the overall number of motor vehicle accident claims filed.
Yet, over the previous year, the Sunshine State broke records with more than 60,000 cases filed, representing an increase of almost 50 percent in one year.
Inaction By Insurers Keeps PIP Alive
Insurers are remaining uncharacteristically quiet about the unprecedented numbers that represent more than half of the state's insurance litigation. Instead of demanding a repeal by lawmakers, they are content with no immediate action, proverbially kicking the Personal Injury Protection System (PIP) "can" down the road.
Their reasoning appears to be profit-driven. Simply put, insurers benefit from keeping the system. When the record-breaking year started, the top 25 car insurance providers raised PIP rates up to 54 percent. On average, rates increased faster than all other premiums by 35 percent. Keeping it alive, if only for another year, will continue to line their pockets.
Florida Remains In A Select Group
While many states have long since abandoned the program, Florida remains one of a select few to retain Personal Injury Protection. Drivers in the state are still required to purchases $10,000 of PIP coverage to cover their own injuries regardless of the party at fault and their existing amount of health insurance coverage. Yet, while consumer rates have increased, PIP's benefits have not significantly changed, nor has it kept up with inflation.
That mandate also establishes another national watermark for Florida as a one of the top six in car insurance bills.
The primary plaintiffs filing lawsuits are not even drivers. Instead, third parties are incentivized to pursue compensation through PIP claims are incentivized. Medical providers, clinics and repair shops offer to take cases to court on behalf of consumers, provided that they sign away the insurance benefits.
Florida Drivers Are Literally Paying The Price For PIP
While most acknowledge problems with PIP, an alternative system not as susceptible to fraud while providing cost savings to Florida drivers is not gaining any traction. Legislative gridlock is also keeping the current program alive. Resolution in the form of a state senate bill has yet to get out of committee.
Meanwhile, Floridians continue to outlay more and more money at record rates.