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Draft report: New PIP law could reduce premiums up to 20 percent

The company hired to evaluate Florida's new PIP law has given preliminary estimates that the reforms could reduce PIP premiums between 12 and 20 percent starting in 2013.

This information is contained in a draft copy of the report, which was given to the Office of Insurance Regulation this week. There could be additional changes before the report is finalized and shared with the governor and Legislature by the Sept. 15 deadline.

The report was produced by Pinnacle Actuarial Resources, a Bloomington, Ill.-based company. The saving are based on the assumption that the new PIP laws will reduce the amount insurance companies pay out in claims between 14 and 23 percent.

The report cautions, however, that overall car insurance premiums could continue to rise. The PIP reductions -- if they occur -- could simply offset other increases, the report said.

Under the new PIP reform law, people injured in a car accident have up to 14 days to seek initial treatment. Those determined to have an emergency medical condition can use the entire $10,000 PIP coverage. All others can only receive up to $2,500 in treatment under PIP.

Read more here.


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So the actuaries estimate that premiums for PIP will go down less than the amounts the insurers will pay out.

It does indeed appear that PIP reform is good for insurers profit margins.

Surprise, surprise, surprise.

Of course, if the Legislature really wanted to fix car insurance, it would crack down with high, felony criminal penalties on individual "victims" as well as on health care providers, and other bad actors in the health care field, that use fraud to milk the system.

That would benefit the insurers and the people they insure, except for the fraudsters out there.

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