State Farm Seeks Increase in PIP Fee

Don't say I didn't tell you this would happen.

In an article in the Tampa Bay Times today, it was reported that State Farm is seeking an increase (that's right an increase) in their PIP rates by 22%. YES, a 22% increase, no savings as promised by Governor Rick Scott in the new PIP law, designed to reduce rampant PIP fraud. According to Gov. Scott, Florida's $10,000 PIP benefit led to widespread abuse, staged car accidents and phony injuries that have sent insurance premiums skyrocketing to a level that many people can no longer afford.  It was alleged that the two biggest areas for fraud in the state are Tampa and Miami. Under the new law, accident victims must be treated within 14 days, starting Jan. 1. Benefits will no longer pay for acupuncture and massage therapy, which state lawmakers decided were not medically necessary. Most parts of the law take effect July 1, including stricter licensing of medical clinics, more use of long-form crash reports and stiffer penalties for providers who commit fraud, although there appears to be a special exception for one particular group of clinics.

What Was The Incentive to Insurance Companies?

Only people with emergency medical conditions can receive the full $10,000 PIP benefit. Others will be eligible for $2,500 in treatment, which is designed to cut down on the range of treatments victims receive. Gov. Scott called PIP fraud a "billion-dollar tax" on Florida motorists. He and Chief Financial Officer Jeff Atwater aggressively pushed for passage of an anti-fraud measure but the bill sponsored by Rep. Jim Boyd, R-Bradenton, almost didn't happen. It narrowly passed the Senate on a 22-17 vote.

What Went Wrong?

The insurance carriers were supposed to voluntarily offer a 10% reduction in premiums for PIP insurance, but were not mandated to do so under the new law.   The logic behind the bill was that accident victims can turn to their health insurance (if they have it) or to the at fault drivers liability insurance (if he or she has it). Unfortunately what the legislature failed to acknowledge is that Florida, unlike other states does not require drivers to carry mandatory liability coverage also known as BI (Bodily Injury Liability Coverage).  Cutting out 75% of PIP benefits with the expectation that injured drivers can collect from other sources makes no sense unless the legislature had added a requirement that drivers carry mandatory BI coverage. At the present time, drivers are only required to carry PIP (personal injury protection) and PD (Property Damage) which covers damage to the other car only, not injury to persons. Mandatory BI was proposed during the discussion of the new PIP law, but the legislature voted against mandatory BI.

So Who Benefits?

The insurance companies now can avoid paying out about $7500 per accident, and pay only $2500.00 of the $10,000.00 benefit you are paying for, and on top of that they not only don’t have to reduce their PIP premiums, they can apply for rate increases. Where is the great big savings, where is the elimination of billion dollar fraud that the Governor was talking about?

For more information or for a free consultation, contact The Law Offices of Charles D. Scott, PA Injury and Family Law Attorneys, by calling 727-300-4878 or view our web site

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