A Florida state House subcommittee recently voted by a 12-2 margin to get rid of PIP insurance. The bill will still need to be be considered and voted on by the entire Florida legislature before becoming law.
Estimates state that would save the average driver $81 in annual insurance premiums, but at what cost to Florida’s citizens?
PIP insurance provides the swift, automatic payment of medical benefits (and lost wages) as a result of injuries sustained from an automobile accident. The benefits provide $10,000 in coverage, only a 20% co-payment (which many medical providers end up waiving unless there is a personal injury case, and a low deductible . The deductible is typically $500 or $1,000. Again, many medical providers waive the deductible.
Critics of PIP argue that PIP is duplicative with health insurance. This could not be further from the truth. One of the most common types of treatment people use their PIP insurance for is chiropractic treatment. Many health insurers have stringent restrictions on the scope and coverage with which they will cover chiropractic treatment.
Furthermore, even if health insurance does cover chiropractic treatment, there is often a co-pay. Thus, we could have injured persons having to pay $50 every time they see the chiropractor. For a scope of treatment that consists of three office visits a week for a period of a couple months, the $150/week quickly adds up.
Before even getting to a co-pay, most health insurers require that a deductible first be met. With the changes in health insurance over the past decade, deductibles are extremely high. For most people, they have deductibles of $5,000-$7,000 a year. So, instead of paying $81 extra for PIP insurance and having no out of pocket expense, an end to PIP could mean that injured persons are paying $5,000-$7,000 out of pocket from an auto accident.
Those advocating to get rid of PIP argue that they will make bodily injury coverage mandatory. That does not come close to the problem created. First, this assumes that all people will abide by the law. As it is, Florida has one of the highest uninsured driver rates in the country, with roughly 25% of people not having auto insurance. PIP insurance is already mandatory.
The best predictor of future behavior is past behavior. Going from mandatory PIP coverage to mandatory BI coverage does not mean that people will suddenly start following the law. So how will consumers have to combat a large percentage of people not having BI coverage? They will have to purchase UM (uninsured/underinsured coverage). This will mean that this big $81 savings is completely nullified, and the consumer will have to end up digging further into their pockets.
Even more significantly, you can only recover in a BI case if you are not at-fault. PIP benefits are also referred to as “no-fault” benefits, as you can get payment for your medical treatment regardless of whether or not you are at the at-fault party.
While there are certainly many gray areas when determining at fault parties, you typically have one at-fault party, and one “not at-fault” party in an automobile accident. The “not-at-fault” party is able to recover from the “at fault” party, but only if the “at fault” party has insurance, or otherwise has the means to pay a judgment. (Typically if they are not paying for insurance, they don’t have the means to pay a judgment).
So what happens to the medical benefits of the “at-fault” party? They are not able to recover from any kind of BI coverage. Thus, they will have to use their health insurance, and may be out of pocket $5,000 – $7,000, or even worse, go without treatment they can’t afford, but desperately need. Accidents happen. That is why they are called accidents. Do we really need an insurance system where our drivers are punished $5,000-$7,000 if they are at-fault for an accident? Isn’t the prevention of that scenario precisely what we purchase insurance for?
Lyle Masnikoff, Esquire
Lyle B. Masnikoff and Associates, P.A.
1645 Palm Beach Lakes Blvd, Suite 550
West Palm Beach, FL 33401
Phone (561) 598-7120
Fax (561) 598-7127