In practice, this seems like a good thing. In reality, however, only 12 states in the country have PIP as a requirement for driving. The other 38 provide it only as an additional option for insurance. So why is this the case? What makes PIP insurance desirable for Florida but not other states? What are the positives and the negatives behind PIP?
Another name for PIP is “no-fault insurance” because with this type of insurance policy, who is at fault in an accident is not a factor. Regardless of where blame is assigned, your PIP policy will pay out if you are injured in a car accident. This runs counter to many other states where a person responsible for an accident must have their insurance company take financial responsibility for the consequences.
PIP is fixed at $10000, with no one allowed to have a policy that compensates for less or even more. The cost of premiums on PIP insurance can be reduced by how much you set your deductible at, which has a maximum amount of $1000.
PIP covers medical costs, including:
• Medical treatment
• Hospital expenses
• Diagnostic services
• Ambulatory services
PIP can also provide coverage for lost wages and even death benefits if an accident results in a loss of life.
However, despite this additional protection for drivers, Florida continues to have some of the highest auto insurance premiums in the entire country. It’s not an exaggeration to say that driving in Florida is more expensive than in other states simply because of the monthly financial commitments of not just gas, but the insurance payments every have their own demands.
This is where some pros and cons of the PIP system come into play and make for a unique insurance environment in Florida.
PIP can sometimes be a lifesaver for people with low or even no health insurance, as the funds are automatically there when required. In other states, even if another driver is proven to be at fault, payment from the other insurance company can take some time as the payments due are processed.
PIP is always there as soon as required.
In some instances, a person may be injured so severely that $10000 is not enough to cover medical expenses, and the other driver is at fault. A personal injury lawsuit is typically the alternative to get the compensation that may be owed to a traffic accident victim. However, if an out-of-court settlement or favorable verdict is achieved for the accident victim, then the money already used by the PIP policy does not have to be repaid.
In other states, if a lawsuit is successfully resolved, whatever money an insurance company has already paid out may need to be reimbursed from a portion of the lawsuit amount.
However, there are also some disadvantages to the PIP system, and these are at least partially responsible for Florida’s high premium situation.
Unfortunately, Florida’s PIP system is prone to abuse in the form of “PIP fraud,” where insurers are tricked out of their money, and it is given to people with no actual need for medical treatment. A typical fraud situation is when an accident victim is approached by someone involved in the fraud and paid for a small cash reward to seek a medical diagnosis from a specific doctor.
In collaboration with an unethical lawyer, the doctor will make a false claim about the person’s injury so that the insurance company will issue out a PIP payment. In most cases, the accident victim will receive little of the money fraudulently acquired through their accident.
This is a deliberate “feature” of PIP designed to reduce the caseload in Florida courts. Unless the injury is serious, even if another driver is at fault, PIP coverage is designed to handle smaller disputes over legal and financial accountability and put the resolution in the hands of insurance companies. This means that accident victims don’t have access to the same legal arsenal as other injury victims in other states.
Contingencies Still Exist
However, it’s important to note that while the number of car accident injury cases in Florida courts is reduced, this doesn’t mean that all of them are. A death in a car accident can still be addressed in court if it is a wrongful death. The same is true for injuries so serious that $10000 is insufficient for recovery.