Will Auto Insurance Changes Really Save You Money?

The Florida Legislature recently made changes to the state-mandated No-Fault Auto Insurance Coverage.  Under this new law, which was a top priority of Governor Rick Scott, people injured in motor vehicle accidents in Florida will have some changes in their benefits.

The new law will eliminate certain forms of massage therapy and acupuncture treatments, and in non-emergency type situations, it will limit medical benefits to only $2,500.  Although Florida drivers are required to have $10,000 in PIP benefits, money that should be available for their medical treatment, those benefits will be limited to $2,500.00, requiring many Floridians to pay for any additional treatment out of their pockets.

At the time the bill passed, Governor Scott stated that the bill would help reduce fraudulent accident claims, and, therefore, benefit the pocketbooks of every Floridian who drives an automobile. However, the reality is that as a result of this bill, Florida drivers are experiencing a severe cut in previously available benefits in exchange for flimsy promises to lower bills.

Florida drivers are still paying for $10,000 in PIP coverage, but it now appears that most injured drivers will see far less than that in actual benefits. With these reduced benefits, most Floridians will now find that they are paying twice for car accident medical treatment:  first, through their car insurance, and, secondly, through their health insurance if they are lucky enough to have health insurance.

Interestingly, as a result of this bill, hospitals can be paid at twice the Medicare rates. However, Medicare providers will be paid at lesser rates.  Auto insurance companies are supposed to file at least a 10% reduction in No-Fault/PIP rates by October 1, 2012, and file a 25% reduction by 2014, or explain to regulators why they cannot make the requested reductions.

However, a headline news article in the Palm Beach Post on August 22, 2012, stated that insurance companies are already beginning to wave the caution flag on whether the requested premium reductions will be passed on to consumers. The article stated that one insurance industry group recently urged “caution and patience” with rates.

In addition, a statement from the state’s office of insurance regulations warns that other factors could affect the reductions: “The projected savings may actually mitigate premium increases, not reduce premiums.” In other words, total car insurance bills might not go down at all;  they just might go up a little less than they would have otherwise.

This new bill has created changes for Florida drivers, and additional changes will become effective on January 1, 2013.  If you have been involved in a motor vehicle accident, please call me for a free case evaluation at 772-464-4600.