PIP Insurance News May 2016
As more and more Floridians hit the road each year, the number of accidents per year -- and the auto insurance premiums -- continue to rise. The Miami Herald reported on May 20, 2016 that premiums had risen 14% in Florida since January 1, 2015.
“People are driving more,” said former state insurance commissioner Kevin McCarty, “and accidents have increased commensurate with that number.”
The Office of Insurance Regulation approved dozens of rate increases over the past 1.5 years. In Florida, the average increase for the top 25 insurance companies was 13.8%. All of these increases have a significant impact on individuals who are on Social Security, which did not see an increase this year. Governor Rick Scott regularly touts Florida's "low cost of living," but the car insurance numbers say otherwise.
Florida is a no-fault insurance state and has required drivers to carry at least $10,000 in personal injury protection (PIP) since 1972. In 2012, Gov. Scott and Legislature took action to fight PIP fraud, which was blamed for increasing premiums. Rates fell for the first 2 years, but have continued to rise since. One major carrier, Allstate Fire & Casualty, has raised their PIP rates by 40%.
A representative of the Insurance Information Institute said that the average no-fault claim at the end of 2015 was nearly the same as four years prior, and that PIP insurance accounts for 1/4 of a total premium's cost. The same representative also attributed the rise in auto accidents with the drop in unemployment rates, because more and more people have to drive to work.
Florida is commissioning a $125,000 study to decide whether or not no-fault law should be repealed, as it has been in most states.
Accident rates have increased across the state, from 5.4% in Miami-Dade to as high as 14.6% in Broward. As the number of crashes increase, so do the number of accident claims. As the number of accident claims increases, insurance companies use that fact as a reason to continue raising their insurance premiums, arguing that their losses are actually increasing year over year because of the increase in claims costs.
For more information, read the original story by the Miami Herald by clicking here.