PIP reform: It's supposed to lower your car insurance - FOX 13 News

PIP reform: It's supposed to lower your car insurance

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TAMPA (FOX 13) -

You've heard the old adage, 'What goes up, must come down.' It seems that has never been true when it comes to auto insurance. But now elected leaders in Tallahassee say that should change with the passage of a new law that took effect in January.

FOX 13 Investigates first started taking a closer look at the fraud epidemic in Florida a few years ago. A state report estimated the cost at nearly $1 billion.

LINK: March PIP report from Florida: http://www.myfloridacfo.com/Division/Fraud/Resources/documents/PIP_Source_Mar13.pdf

The higher cost is passed along to drivers in the form of higher insurance rates in the PIP portion of your policy. PIP stands for "personal injury protection."

"The criminal element will find a way to extort money from even the best of policies, and they have found it here," said Florida CFO Jeff Atwater back in 2011.

LINK: A history of PIP: http://www.insuringflorida.org/articles/florida-no-fault-auto-insurance-a-historical-primer.html

Atwater made PIP reform his number-one priority after taking office. PIP was supposed to provide money for medical treatment regardless of who is to blame for an accident, but it was ripe for fraud. Hillsborough County led the state in bogus claims a few years ago.

Politicians in Tallahassee passed a new law that took effect in January making it tougher now to collect. Under the new law, treatment must begin in 14 days for an emergency medical condition, and non-emergency benefits are capped at $2,500 instead of $10,000.

"The entire exercise of changing the law was not for the insurance industry, it was for the consumer. Rates had gone up 80 percent in two years, 80 percent in our local market."

LINK: PIP reform bill: http://www.insuringflorida.org/articles/florida-pip-bill.html

So what happen to the promises of slashing rates for auto insurance? We asked Lynne McChristian with the Insurance Information Institute.

"If the reforms work, the rates will go down," McChristian said.  "Your insurance policy is a contract, and with all insurance it's a six-month contract, so if your policy renewed at the end of last year, you have several months before it would take effect for you."

McChristian says by July, most drivers should see the impact of the new law. But now, there's a battle in the courts that could strike down it down. Last month, a Judge in Tallahassee ordered a temporary ban on enforcing some parts of the law, saying it violates Florida's Constitution.

The state's Office of Insurance Regulation appealed, which suspends the ruling. Atwater is confident the law will be upheld and rates will soon fall, but if they don't, he wants to hear about it from drivers.

"If their insurance company doesn't react, I hope they give me the call," Atwater said.

Promises made, but still yet to be determined if the promises are kept.

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