The personal injury protection in your Florida auto insurance policy pays for the medical bills, lost income and other expenses associated with an injury that happens to you and certain passengers you have during a car accident. This coverage is required for all Florida drivers, and it’s a popular benefit, but one that is often purchased in minimal amounts in order to satisfy regulations alone.

The Dangers of Minimal PIP

Buying just the minimum amount of PIP required by law is not a savvy financial move. In Florida, your insurer will likely set your PIP limits at $10,000. Although, with the cost of medical treatment expecting to rise as much as 8.5 percent in 2012, that $10,000 limit will soon be outdated if it isn’t already.

Instead of crossing your fingers and hoping that the state minimums provide sufficient protection for you and your passengers, it may be smarter to increase your limits. You can do so by adding additional PIP coverage or adding Medical Payments coverage.

Options when Increasing PIP

When you increase your PIP coverage, you may choose coverage that excludes ‘work loss.’ That means that the additional PIP benefit will not reimburse you or your family members for any income lost as a result of the injury. This will make the expense of the added PIP easier to bear, but if you don’t have sufficient vacation or sick time benefits or a disability policy, you could be creating further financial problems by choosing this option.

Another important consideration in PIP coverage is the deductible you’ve chosen. You can choose from a PIP benefit with no deductible, or a deductible between $250 and $1,000. While your deductible might seem affordable at first glance, it’s important to remember that auto insurance deductibles are out-of-pocket expenses that the insured is not responsible for per year, but per incident. So if you have multiple incidents within a year you may need to pay your PIP deductible several times.

If you have questions about potential shortfalls in your PIP coverage, or any other aspect of your insurance plan, let us know. We can talk to you about the average amount of the claims in your area and determine whether your current Miami Auto Insurance is sufficient to meet that average and, if not, how the experts at Allstar Direct Insurance can fix it.

Unfortunately, PIP has been terribly exploited by unscrupulous legal entities and fraudulent medical care practitioners. Because of this, insurance companies are abandoning the marketplace, the amount of uninsured drivers is increasing at an alarming rate and the financial burden of increased insurance premiums are significantly affecting the middle class, the working class and seniors on fixed income.

The causes of the problem are obvious. Staged accidents, where those involved clearly know they are engaging in criminal activity, account for only a small percentage of fraudulent PIP claims. Due to media bombardment, PIP has become, in the minds of Floridians, just another “benefit” or “entitlement”. Radio stations are playing commercials and hip-hop artists are referencing injury clinics and legal referral services in their songs, essentially turning a crime into an accepted trend. Drivers are becoming indoctrinated that any time they are involved in an automobile accident they are “entitled” to “collect” under PIP “benefits”. Furthermore, only hours after an accident, even the most minute fender-bender in a parking lot, the involved parties will be contacted by numerous legal entities and fraudulent medical care practitioners and clinics. They become the prey of the PIP fraud “cartel”.

This problem of “passive” PIP fraud needs to be addressed with the same vigor as the staged accidents are addressed. Because insurance companies will be challenged in court if they refuse to pay a fraudulent medical care provider or clinic, they have few choices except paying the fraudulent claims and raising everybody's premium or simply not doing business in the State of Florida altogether. The law is allowing these professional criminals to get away with this fraud. Any type of reform has to render the State of Florida as no longer profitable for the PIP “cartel” to conduct “business” in.

We strongly believe that Florida must maintain it's PIP “no-fault” coverage, while also mandating Bodily Injury Liability (BI) and Property Damage (PD) coverages. We must ensure that any reform will restore PIP to it's original intended purpose while maintaining affordability and availability.