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The Future of PIP

MIAMI-INSURANCE-CLAIM-LAWYER-2-300x199Lawmakers in Florida are once again getting ready to repeal the highly criticized state’s no-fault auto insurance, which many allege is plagued by fraud, elevated costs and outrageous civil litigation.

Senate Bill 378, which has been presented by State Sen. Tom Lee (R-Thonotosassa), would repeal provisions of the personal injury protection (PIP) statute and move to a more tort-based system. This change however, is one that not all seem to agree upon.

By way of an email to Florida Record, Logan McFaddin, assistant vice president of state government relations for the American Property Casualty Insurance Association (APCIA) stated; “In its current form, SB 378 does not have any bad-faith fixes and has a mandatory medical pay offer, which would result in significant costs to Florida consumers and no real fraud-fighting protections.”

According to the APCIA’s, if Senate Bill 378 is passed, there would be a considerable rise in the number of uninsured drivers on Florida roads. According to Mcfaddin, “Florida already has the highest rate of uninsured motorists in the nation at 23% and we simply can’t afford to add more to that already alarming statistic.”

Players in the automotive insurance trade have also expressed their disapproval stating that trial lawyers, who are not alone, have taken part in filing dubious PIP lawsuits and claims. Undeniably, the Florida Office of Insurance Regulation (FOIR) informs that over recent years, PIP claims and payments have risen but that the number of auto accidents has remained stable.

Furthermore, and according to the FOIR, PIP claims account for an enormous number of insurance fraud referrals.

The president of the Florida Association of Insurance Agents, Jeff Grady, concurs that PIP results in vast accounts of litigation and fraud. In past interviews however, Grady told the Florida Record that endeavors to modify the system draw a vast number of stakeholders – insurers, medical providers, lawyers – which result in different views towards the details of repeal legislation.

Grady stated; “While broken, it’s in a stalemate to fix it,”. “…In no fault, the system has become well understood by people who want to game it.” Adding that the result is; staged accidents, a high percentage of uninsured motorists, and litigation mixed in.”

At first, PIP was implemented to give drivers up to $10,000 to cover urgent medical expenses, instead of utilizing the court system to decide which driver was to be held at fault following a car accident. According to critics, the system has been expensive and unproductive. Furthermore, study carried out and made public by, reports that Florida auto premiums rank third nationwide in terms of high costs. 

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