Florida drivers are still waiting for the promised savings to kick in.
Over one hundred auto insurance companies were required to report their intentions to reduce their rates on Monday, as a result of the massive changes to the personal injury protection (PIP) plan in Florida.
However, as many predicted, these insurers didn’t show any clear intention to reduce prices.
A new law in the state required that these auto insurance providers send a rate filing to the Office of Insurance Regulation at the start of October, which would either show that PIP rates had been decreased by 10 percent, or that would offer an explanation as to why this reduction would not be possible. Though the filings are still being reviewed by the state, as the majority were filed at the last moment, on Monday, initial indications show that few reductions are occurring.
Preliminary reviews are showing that auto insurance increases will be reduced, but that current premiums won’t.
Instead of lowering the auto insurance premiums that drivers are currently paying to the insurers for their coverage, there will be a slowing or a reduction in the increases to rates that will be seen in the future. According to Kevil McCarty, the Florida Insurance Commissioner, even this should be considered to be a step forward.
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McCarty explained that “Although it initially appears the savings will result in a mitigation of rate increases rather than actual rate reductions for most companies — it does represent a major shift in the trajectory of PIP insurance rates in Florida.” The new law was implemented in March, following a massive outcry against the skyrocketing insurance rates across the state, particularly for PIP.
Those demanding change included everyone from consumer advocates, auto insurance executives, high-profile lawmakers, and even the governor of the state, Rick Scott. On the final day of the legislative session for 2012, the lawmakers gave their approval for a number of alterations to the state’s system for mandatory no-fault coverage. One of these changes demanded that PIP rates be cut by insurers by 10 percent by October 1. Another 25 percent reduction will be required by January 2014.