Insurance Companies Successful in Lobbying for New PIP Law
Recent changes to Florida no-fault or personal injury protection (PIP) law that occurred in 2013 have had a profound impact on anyone that purchases or sells auto insurance. To best understand the implications of the changes that have occurred and the factors that caused the changes. It is important to understand where the law stood before the changes took place. Florida PIP law once had a framework that served the interest of both the insured party and the insurance company in a way that is much more effective than the current framework. Prior to the changes, Florida motorists and pedestrians that were injured by a car accident were entitled to the $10,000.00 of PIP benefits that they were and still are required to purchase under Florida law.
Old PIP Law in Florida
Under the old PIP law, an insured party was given much more freedom in exercising their rights to benefits under their plan. Insured parties were able to seek treatment with the healthcare provider of their choosing. An insured person was not given time restrictions on when they needed to see a healthcare provider. The old PIP law also had a framework for protecting insurance companies from fraudulent claims. Many common sense reasons for denying PIP benefits were provided to the Insurance companies. The list of reasons included: disallowing PIP benefits for intentionally causing the accident, denying benefits for unlawful treatment, denying benefits to people who knowingly submit falls claims, and about ten other reasons.
The old and seemingly effective system for providing motorists changed as of 2013. The need for a new PIP law was promoted and the old PIP law became a target. Insurance companies aggressively lobbied for a new PIP law. Insurance companies proclaimed that insurance fraud was “rampant” and that changes needed to be made to protect the insurance companies and the general public. The insurance companies claimed that a new PIP law would reduce fraudulent claims and prevent prices of insurance from going up to everyone else. Eventually, the insurance companies got their way. A new PIP law was created and major changes were made in the process. The changes to the impacted everyone involved, as they were intended to do. The impact was far less beneficial than the insurance companies claimed it would be.
In with the New PIP Law
The new PIP law in Florida not makes it more difficult for injured policy holders to receive the treatment they need and collect the benefits they are entitled to. The new PIP law also makes it more difficult for insurance companies to prevent fraud. Several hurdles to collecting PIP benefits were added that make it more difficult for policy holders to receive their benefits. Policy holders must now see a qualified physician and be found to have sustained an “emergency medical condition” (EMC) to receive the full $10,000.00 under their policy. Without a documented EMC, policy holders are limited to only $2,500.00 of their benefits. Florida drivers also must also receive medical treatment within fourteen days from the date of the accident. Insurance companies may also delay admiration of benefits for an additional 60 days if it has any “reasonable belief” that fraud has been committed by the claimant. Arguably the most restrictive change of all is the exclusion of acupuncture and massage from PIP coverage entirely. This restriction in the new PIP law plainly restricting the freedom of patient treatment options.
Taken together, the new PIP law changes to the processes for receiving benefits from PIP benefits. The new PIP law makes it much more difficult for all policy holders to receive what they are entitled to. The most disturbing aspect of the new PIP law is the substantial increase in the likelihood that patients will not receive all or any of their benefits. Any policy holder that does not comply with the time limits for any reason can be barred for from receiving benefits for care that they legitimately need. The effect of the new PIP law calls into question the efforts by the insurance companies when they lobbied for them. Are these requirements really in place to prevent fraud? More realistically, are they in place because the insurance companies can rely on policy holders not to follow the requirements. When policy holders do not comply with the requirements of the new PIP law, it means substantial sums of money are not being paid out.
The Effect of the New PIP Law
To summarize the effect of the new PIP law, the successful lobbying efforts by the insurance companies have done little to prevent fraud. Further, they have made it much more difficult for patients to receive benefits. Proof that insurance companies have profited from law change comes as no surprise. It is estimated that after the new PIP law was made in 2013, the industry has saved as much as half a billion dollars in a single year. Recall that keeping insurance rates low to the general public by preventing fraud (cost) to the insurance company was a central argument used to support the new PIP law. However, in spite of insurance companies saving hundreds of millions of dollars, they have continued to raise premiums for policy holders. In other words, the new PIP law is cheaper for insurance companies and more expensive for drivers.
The detriment to the general public created by the new PIP law is five-fold. First, many policy holders are receiving the reduced benefits or no benefits at all. The result of not complying with the requirements of the new PIP law. Second, in many cases policy holders have hurdles and delays to get through before receiving the benefits that they are entitled to. Third, policy holder freedom to choose medical treatment is plainly restricted by preventing certain forms of treatment altogether. Fourth, insurance premiums continue to increase. Despite the massive savings that insurance companies have received because of the change in the law, policy holders are still paying more. Fifth, fraud is no less “rampant” than it was before the change in the law. These findings can only lead to one intelligent conclusion: the new PIP law was not promoted for the benefit of the general public or to prevent fraud. It was lobbied for aggressively by massive insurance companies that only wanted to increase their profits.
The current PIP law continues to take its toll. It is virtual certainty that insurance companies will save hundreds of millions of dollars every year from withholding PIP benefits. Those savings have come in part from denying claims to injured people that legitimately need it. As long as the current law stands it is important that the general public becomes aware of the requirements they must comply with. Policy holders must comply with requirements of the insurance companies that the new PIP law allows. It is the only way for policy holders to protect themselves from losing benefits that they are entitled to. Seeking the council of an attorney at Florida Litigators, PLLC can help protect you from losing out on benefits that you deserve. While this article attempts to simplify the law for purpose explanation, it is far more complicated. Even accident victims that believe that they understand their policies and the law often benefit greatly from seeking council from an experienced attorney.