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Personal Injury Protection (PIP) Insurance


PROBLEM: Staged accidents and other fraudulent activities, coupled with high attorney involvement in a supposedly no-fault system, continue to drive up the cost of personal injury protection (PIP) insurance to a level at which those Floridians who most need it can hardly afford it.

BACKGROUND: In 1972, Florida adopted a mandatory no-fault motor vehicle insurance law. Florida’s no-fault coverage, also known as PIP coverage, provides for up to $10,000 in medical, disability, and funeral benefits to those injured in motor vehicle accidents. It is a “first party” coverage, meaning that the injured person gets the benefits from his own insurance policy without having to sue, regardless of who caused the accident—hence the “no-fault” name. In exchange for the benefits, restrictions are placed on the person’s ability to bring suit for things such as “pain and suffering.”

Over the years, the legislature has tried to reform the system and fix problems, but as soon as one “fix” is enacted, another problem emerges. In recent years, some in the insurance industry have suggested that PIP be repealed and replaced with mandatory liability insurance. This year is no exception, but the voices for “repeal” are getting louder.

SOLUTION: Florida’s independent insurance agents support responsible measures to make auto insurance more affordable for consumers. While the universe of individuals carrying PIP-only coverage is small, they tend to be lower-income Floridians who are the most affected by rate increases that result from PIP fraud.

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