What is PIP Insurance Coverage - and How Insurance Companies Just Lost Their Latest Try at Getting Florida to Gut PIP Coverage

Personal Injury Protection, or "PIP" coverage, is something offered to Floridians as part of their automobile insurance policy. Right now, under Florida law, every car owner and driver must have at least $10,000 PIP coverage.

If you are in a car accident in Florida, this PIP coverage kicks in, never asking who's to blame. The $10,000 coverage is there, ready to help. Since the insurance company isn't allowed to assess blame here, Florida is called a "no fault" state.

PIP will cover up to 80% of your medical bills and up to 60% of your lost wages - up to that $10,000 cap. No questions asked.

Insurance companies are against PIP coverage because they are arguing that too many people take advantage of it, setting up fake insurance claims just to get the money. We've discussed this before; now, however, Tampa's Fox 13 Investigative Reporter has just published its own expose on PIP coverage fraud, which may help drive those pushing the legislature for change in the future.

Florida is No. 1 in the USA for Fraud PIP Claims

According to Tampa Bay reporter Doug Smith, Florida is actually number 1 in the United States for these kinds of fraud -- and Tampa is tops within the state for filing fake PIP claims.

According to the Fox story, many of these fake PIP claims are professional jobs where there are staged wrecks and clinics are set up to handle the filings. The crashes are set up to have lots of folk involved, so that $10,000 cap can be milked. Eight people can mean close to $80,000 from one scam. The news story goes on to interview those in the know, including police detectives who suggest that these big crash scams are orchestrated by organized crime.

Florida Legislature Nixes Reform - No Changes to PIP Laws for Now

In January, we discussed PIP reform proposals that were being talked about up in the state capital and the efforts of insurance carriers to push reforms through, from bill to law. They've failed.

The insurance industry had gone so far as to build up proposed comprehensive reforms to Florida's PIP laws, creating one big comprehensive personal insurance coverage reform bill.

Around ten days ago, that all fizzled out when the Florida House committee hearing the proposal voted against it. Specifically, HB967/HB1411 - the biggest attempt at changing PIP laws here in Florida in the past 4 years - died as it was voted down by the Florida House Subcommittee on Health Care and Human Services.

Read the dead bill's language here -- and see for yourself that what didn't succeed into turning into law this year was not only an attempt at altering your insurance coverage (instead of boosting regulations to stop criminals via criminal investigation, etc.) but an attempt to:

1. give the insurance companies the right to cap the charges they would cover under PIP for medical services;

2. limit the amount of money that attorneys could charge for their work regarding these crashes; and

3. granting the insurance company even more time (read that delay) in investigating claims before they pay.

It's one thing to fight crime. It's another thing to hurt all Floridians who unfortunately are involved in an accident. Sounds like lots of Florida accident victims may have just dodged a bullet.

By Bryant Esquenazi on May 10, 2011 3:41 PM