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Reports call efficacy of auto insurance reform efforts into question

Wed May 11th, 2016 on     Insurance Claims,    

Four years ago, state lawmakers were confronted with growing outrage on the part of their constituents over skyrocketing auto insurance premiums. In response, they passed a series of reform bills, ultimately signed by Governor Rick Scott, that were designed to both lower the cost of insurance and help combat the unbridled fraud present in the state’s no-fault coverage, otherwise known as Personal Injury Protection.

Fast forward to the present, however, and it appears as if the twofold goals of the 2012 reform package have yet to be realized.

A recent report indicates that records from the Florida Office of Insurance Regulation reveal that drivers in the Sunshine State continue to pay exceedingly high auto insurance premiums — some of the highest in the U.S.

Indeed, it found that auto premiums as a whole have jumped by 13 percent and PIP premiums have jumped by 14 percent since January 2015.

As to why the overall price of auto premiums has gone up, experts indicate that it can likely be attributed to the simple fact that the state has seen more car accidents over the last two years.

Data from the Florida Department of Highway Safety and Motor Vehicles would seem to support this assertion, revealing that motor vehicle crashes increased by as much as 8.3 percent in 2014 and 7.1 percent in 2015.

As for the rate hikes in PIP coverage, which is designed to cover you regardless of fault and reduce the need to go to court to recover accident-related damages, experts are concluding that the efforts to combat fraud in this area have failed.

In fact, outgoing Florida Insurance Commissioner Kevin McCarty has long been a proponent of following the lead of other states and doing away with PIP entirely, a controversial move that has failed to gain traction in the Florida Legislature.       

“I think the reforms have not been as effective as they had hoped,” he said prior to leaving office. “I do think there’s still fraud in the system and I’m not sure I could make the argument that PIP is worth saving.”

Another disconcerting finding by the aforementioned report was that insurance companies are continuing to rake in far more in PIP premiums than they are paying out. Over the last three years alone, Sunshine State motorists have paid $9.9 billion in PIP premiums, while the insurance companies have only paid a little more than $6 billion.

It remains to be seen how lawmakers will respond to these staggering numbers.

If your insurance company has seriously underpaid or unnecessarily delayed payment in relation to an auto accident, consider speaking with an experienced legal professional who can help you hold them accountable.

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