PIP Reform in florida
Florida is one of the few states that have no fault insurance coverage and an emergency rule recently passed to help protect insurers. Earlier this year, Florida legislation revised the Personal Injury Protection (PIP) law. The trouble was this law takes effect January 1, 2013 and while there had been progress in establishing a permanent rule on limits, it wasn’t feasible to solve the issue by the New Year. Insurance companies were pressuring lawmakers for a result. Customers need to know what their limits are. With this provision, victims receive $10,000 in benefits for injuries requiring emergency care but that number drops significantly when it comes to non-emergency injuries. The most paid out is $2,500.
Insurance Commissioner Kevin McCarty has been working on a more permanent rule but due to rising frustration from insurance companies, implemented a safe hold. He says, “In an abundance of caution for the industry and to protect consumers and make sure they are advised of their new benefits on policies issues after January 1, we are presenting this emergency rule.” McCarty did face some opposition from some people that believed an emergency rule was not necessary but ultimately, the consumer had to know that a significant change had happened to their benefits by the time the law was in place in January. Florida plans on putting a more permanent rule in place. A form will be given to accident victims so they are aware of their benefits under state coverage.
What is No Fault Insurance?
This will only apply to a select group of people living in states that have no fault insurance. These include D.C., Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Montana, New Jersey, New York, North Dakota, Pennsylvania and Utah. The term no fault insurance can be very misleading so it is best to start with the basics. Generally, no fault insurance is a policy that will for damages and injuries sustained in an accident despite who was the driver at fault. One of the main points of a no fault insurance policy lies in the ability of the accident victims to sue each other.
Because the insurance company is paying out damages regardless of who caused the accident, both parties right to sue each other is very limited, depending on which state you live in. Of course, your insurance company will only pay up to the limits for your individual policy. Making its citizens knew their coverage amount and how they had changed was the main motivation for the emergency rule that was passed in Florida. Be sure to check your personal policy to see what your limits are. In a true no fault system, victim would not be able to ever sue each other but all states have adopted varying degrees of no fault insurance. This is because states don’t want to necessarily limit its citizens’ right to sue if they feel they have been wronged.
What Makes No Fault Different Than Other Insurance Policies?
In all states, comprehensive and collision coverage will cover for any damages that are done to your car or someone else’s and a minimum of liability is required in all states except New Hampshire. Liability will cover damage done to another person’s car. While these take care of damages, in even minor accidents, there are medical injuries that can be sustained and those will cost money. With no fault insurance, the insurance company will pay for this regardless of who the at fault driver was. There are other kinds of insurance policies present in other states such as tort or choice states, where no fault is included as an option but not required.
Tort systems are considered to be a traditional form of insurance. Bill Feldhaus, associate professor of risk management and insurance at Georgia State University says, “In a tort system, you have to rely on going through the at-fault party. In a way you are at the mercy of the other person and insurance company to get prompt payment for medical bills and any injuries you have sustained.” Because this could take a very long time, tying up courts and costing people a lot of money, no fault insurance began to become popular during the 1960’s.
All medical costs would be covered but any kind of costs considered to be non-economic, or those associated with any consequential pain and suffering, would not be covered. If the damages are above and beyond what your limits are, some states may revert to the tort system which requires finding out who the at-fault driver is. As you can see, no state is truly working with a no-fault system and it can be confusing. Be sure to check your state guidelines and see if your state is one that adheres to a no fault policy. Your insurance agent can better explain how your state’s policy can affect you.
What is Personal Injury Protection?
PIP is a type of insurance coverage you can add to your policy regardless of whether you live in a no fault state, a tort state, or a choice state. It is often closely associated with no fault insurance coverage because of what it covers. In an accident, PIP will cover medical expenses, wages lost due to the accident, loss of services, and even funeral expenses. Of course, it will only cover up to the policy limits which you choose. You don’t always need to add PIP to your insurance coverage.
It may seem like an attractive option at first but if you already have substantial amounts of health care coverage as well as life and disability insurance, this can usually cover the same sorts of things PIP can. Be sure to look at your individual circumstances as well as your state guidelines to determine what kind of coverage you need and at what amounts. If you take the time to do this before something happens, when and if it does, you will have one less thing to worry about.
