Florida Ranks Dead Last in Insurance Regulation Report Card Due to Recent PIP Reform :: Whittel & Melton


1133804_sign_success_and_failure.jpgIn a state-by-state ranking of regulatory departments conducted by the R Street Institute, Florida received the lowest point total, receiving a grade of F, in the think tank’s first ever “report card.”

The report, released in June, compiled points through 14 categories, doling out the lowest point total of any state in the U.S. to Florida, -32 points.

According to Online Auto Insurance, Florida’s major deductions arose from the category of “politicization.” Point deductions were received by states where industry regulation was a main campaign topic. Florida was deducted 6 out of the maximum 10 points because of new changes in its personal injury protection coverage. This reform was a major campaign topic for Gov. Rick Scott who said the system was inflating car insurance rates in Florida.

Four other states were deducted the same amount of points or higher for the category of politicization.

While the institute did commend Florida’s efforts to change the PIP system, they added that the “comprehensive reform package” approved by legislators also presented certain rate restrictions. Under the new PIP system, insurers will have to explain why the reforms did not allow them to reduce rates by at least 10 percent by October 2012 and by at least 25 percent by January 2014.

Florida received additional low marks for how it handled territorial ratings. Florida is one of 10 states that allow insurers to use where a person lives to determine their rates. According to the institute, Florida “enforces restrictions on the use of territory that are much more stringent than the norm.” This finding resulted in a maximum deduction of 5 points in the report card’s “territorial rating” category. Florida’s territorial ratings were set in place in 2006.

While landing at the bottom of the pile, the Sunshine State still managed to perform well in other categories including “fraud enforcement” for which the state reaped the maximum number of five points. Only three other states were awarded the same points – New Jersey, New Mexico and California.

As of July the new PIP reform in Florida includes the following:

• Statewide anti-fraud task force
• Tougher licensing standards for medical clinics
• Wider use of long-form accidents reports
• Tougher penalties for providers caught defrauding the system
While these changes are in new policies now, drivers in Florida won’t see major changes to their PIP coverage until 2013. Starting Jan. 1, those injured in car accidents will have 14 days to seek initial treatment. Currently, there is no cutoff period for when an injury victim must obtain medical care. Additionally, only those diagnosed with an “emergency medical condition” by medical doctors, osteopathic physicians, dentists, physician assistants or advanced registered nurse practitioners will be eligible for the full $10,000 PIP benefit. Those suffering less serious injuries, will only receive $2,500, despite spending the same amount for this “no-fault” coverage. Note, Florida drivers will stay pay the same amount as before, only now receiving less coverage.

The benefits of the PIP changes could take months, possibly years to happen, so lawmakers have warned drivers not to expect their insurance rates to drop anytime soon. Insurers want to see if the number of fraudulent claims and lawsuits decrease before determining whether rates can be reduced without affecting their bottom lines. However, as part of the law, insurers must either decrease PIP premiums by 10 percent or clarify why they cannot by Oct. 1. Never mind of course, the amount of money insurance companies will pay on future PIP claims does not appear to be a consideration on whether or not our rates will be reduced…troubling.

If you would like to find out more about Florida’s insurance laws and the recent PIP reform, contact the Florida Personal Injury Attorneys at Whittel & Melton online or call online or call us statewide and toll-free at 1-866-608-5LAW (5529).

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