Auto insurance law in Florida designed to beat fraudsters

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insurance fraud

New PIP regulations takes aim at reducing fraud and keeping rates under control.

The Florida legislature has now made amendments to its auto insurance personal injury protection (PIP) benefits for drivers in the state, eliminating certain types of medical treatment coverage, such as acupuncture and massage.

Governor Rick Scott signed the bill that is designed to reduce the fraud in the state.

Bogus auto insurance claims are spiraling out of control in Florida, causing premiums to skyrocket. Though proponents of the bill are seeing this as a victory against those problems, there is still some controversy surrounding it.

The PIP auto insurance law in question, is HB 119, and it applies to all drivers in the state. It requires them all to carry PIP coverage, which will pay for up to $10,000 in medical bills, no matter who is at fault for the vehicle crash. Unfortunately, there is a large problem with fraudulent claims, and this issue is growing larger every year.

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People are using the benefits from this form of auto insurance to pay for services from acupuncturists and massage therapists. Though this had been legal when it was a therapy to treat a genuine injury from a car accident, many of the claims are to receive the services for reasons that would not be covered by the policies.

Furthermore the auto insurance law has been changed to limit non-emergency benefits.

Those payouts are now capped at $2,500. The new regulations also put a limit on attorneys’ fees. Though this may seem that coverage is shrinking, the entire purpose of the amendments to the law are to help to push auto insurance rates back down. In fact, the law now states that insurers are required to drop their PIP premiums by 10 percent by October, and by an additional 25 percent by 2014.

Insurers that do not make the required auto insurance premium reductions are required to justify their decision not to. The new law will likely be challenged on one or several different levels, and a decision will probably need to be officially made regarding whether or not it has constitutional validity.

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