The original goal of no fault insurance was to lower auto insurance premiums by avoiding litigation expenses. Feasibly, when an accident occurred, both parties would be equally culpable for covering the damages. Say someone rear-ended you while you were just sitting at a traffic light, minding your own business. In a Florida no fault scenario, your insurance company would pay out the claim to cover the damage to your car and injuries. The guy who hit you would be charged a higher annual premium for his insurance. Since both companies will have accident claims, it’s believed that eventually the costs should even-out.
Why Florida Residents Want To Dump PIP No Fault
When Colorado ditched their no fault auto insurance, state motorists saved 35 percent on their auto premiums. Colorado did increase the rates slightly for Bodily Injury Liability insurance, but motorists still saved about $322 per year, per vehicle. Prices have not increased since.
On the other hand, Florida no fault drivers have witnessed staggering rate hikes, with some families paying over $3,000 in annual PIP premiums. Critics of the law say that it does not punish at-fault drivers enough and, in many cases, it punishes perfectly good drivers. Only 10 states have a no fault insurance law, including: Hawaii, Florida, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah.
What Is Being Proposed
In Florida, PIP represents 20 percent of a driver’s auto insurance bill. Rick Scott is pushing a measure that would reduce a driver’s total bill by 5 percent by shifting some of the expense to the health care insurance companies. Injured motorists would then be unable to receive compensation for massage therapy or acupuncture. They would also have to seek treatment within 14 days and would receive a limited benefit of $2,500 for a qualified treatment (rather than the full $10,000 benefit).
“Instead of measures aimed at preventing true fraud, we’re left with a bill that pads the pockets of big insurance companies while stripping consumers of choice and benefits,” Bill Newton, executive director of the Florida Consumer Action Network, told The Palm Beach Post.
What You Can Do
For now, the best you can do is get multiple Florida auto insurance quotes and shop for the best rate!
