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Florida PIP law report may have spoken too soonPosted On Thu, August 9, 2012
A recently-released Pinnacle Actuarial Resources report on Florida's new personal injury protection (PIP) law created a media frenzy with the announcement that the law will reduce no-fault auto insurance rates and premiums by 12 to 20 percent, but Florida insurance regulators are advising consumers not to get too excited.
The new law, designed to curb the fraud associated with Florida's mandatory no-fault auto insurance law, went into effect earlier this year. Under the reform, accident victims are now allowed only 14 days to seek covered treatment. Also, insurance companies will now cover only $2,500 worth of medical expenses, instead of $10,000. A victim can now only receive injury coverage of $10,000 if he or she has the permission of a doctor or other medical professional - excluding a chiropractor.
The Florida government hired Pinnacle to determine the effect of the new legislation on Florida auto insurance premiums, with the resulting report stating that premiums in 2013 could be reduced significantly, thanks to fewer fraud claims.
However, the Office of Insurance Regulation has issued a statement informing consumers that the preliminary report is just a prediction. The numbers may change by 2013, and regardless, auto insurance companies are not required to lower their premiums. In fact, premium prices are slated to increase - but the PIP law will even them out, leaving a static rate. According to insurance regulators, the new law is likely to have very little effect on the auto insurance premiums of most consumers.
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