One good thing coming from the Florida Legislature

[manasia]

Florida PIP Auto Insurance System Taxes ‘Joe and Mary Lunchbox’

Florida Insurance Commissioner Kevin McCarty gives a bleak outlook of the state’s out-of-control personal injury protection (PIP) insurance system.

Benefits paid on no-fault PIP claims has skyrocketed 70 percent since 2008 though the amount of licensed Florida drivers has remained steady and the amount of accidents has decreased.

McCarty blames the massive rise in PIP paymentsâ€"about $1.43 billion in 2008 to $2.37 billion in 2010â€"on fraud and abuse.

Rising medical costs can be blamed for some of the increase, “but not 70 percent,” McCarty tells the Florida Cabinet.

The statisticâ€"derived from a data call of 31 companies representing 80 percent of the marketâ€"struck Gov. Rick Scott, who likened the increase to an $800-$900 million tax increase for Floridians.

“Yes, it comes out of the pockets of Joe and Mary Lunchbox,” McCarty says. “And it could be through no fault of your own. You could be a very good driver.”

Since the last round PIP reforms were implemented in 2007, fraudsters have “perfected a system of finding weak-points” in the system, he adds.

To illustrate the point, McCarty charted PIP premiums for a married 40-year-old woman and an unmarried 25-year-old man, both with clean driving records. Since 2005, premiums for each have increased at least 84 percent.

Insurers have increased PIP premiums dramatically just to break even, but they are failing. Despite increases, every dollar a PIP insurer collects goes directly to paying PIP medical benefits. Add in other costs, and the PIP combined ratio nears 140.

“Obviously, that is not sustainable,” McCarty tells the Cabinet. He called the situation a “crisis.”

“Companies are not going to lose money,” McCarty explains. Insurers are going to ask for even more rate or “find ways to deploy capital elsewhere,” he adds.

Efforts by the state Legislature to curb PIP fraud have been “largely unsuccessful,” says the commissioner. Reforms are met with opposition from medical providers and attorneys, each of which has a big stake in the system.

This year during the Legislative Session, bills designed to beat back fraud and abuse in the PIP system were killed by a legislative committee. McCarty says he is meeting with sponsors of these bills to once again discuss a plan to reform the system.

State Chief Financial Officer Jeff Atwater says the system should be abolished if lawmakers cannot fix it. Alternatives need to be considered if legislators won’t work to come to a conclusion, he adds.

http://www.propertycasualty360.com/2011/08/17/florida-pip-auto-insurance-system-taxes-joe-and-ma?t=auto

[Dog Walker]

With medical service providers and tort lawyers against it, do you really think reform or abolishment really has a chance?

[manasia]

With medical service providers and tort lawyers against it, do you really think reform or abolishment really has a chance?

If they can find a reason to make Rick Scott believe that it is an entitlement program it will be gone!!! (Bad joke)

It is going to be an uphill battle for any time of reform or repeal of the law, but I am not giving up hope.

[banjo]

I would love to see us do away with PIP and require Bodiliy Injury Liability... and increse required Property Damage Liability limits while we're at it, and offer un/underinsured motorist Property Damage. Who knows how that would affect the number of uninsured motorists on the road though.

[manasia]

I would love to see us do away with PIP and require Bodiliy Injury Liability... and increse required Property Damage Liability limits while we're at it, and offer un/underinsured motorist Property Damage. Who knows how that would affect the number of uninsured motorists on the road though.

good Point Banjo.

[Dog Walker]

I've been in third world countries where all parties bolt and run away from an accident, abandoning their cars rather than get involved with that countries legal system.  If the cost of insurance gets so high here that a lot more people are driving around without insurance, we might see that start happening here.