Is Car Insurance The Midterm Election Issue In Florida?

The US midterm elections are scheduled for November 4 when voters will elect new representatives to the federal and state legislatures.  Many issues are becoming the ballot box question in certain states but for voters in Florida, the ballot may come down to who has the best plan to lower car insurance rates.

The candidates to become the next Governor of Florida are former Governor Charlie Crist and his successor, current Governor Rick Scott.  The two candidates engaged in two debates to date, but did not address the rising cost of car insurance in either outing – something political analysts say was a mistake for both representatives.

Florida is one of the states that have mandatory “no fault” insurance called Personal Injury Protection or PIP.  Florida lawmakers made PIP mandatory in the 1970s to expedite claims for up to $10,000 to remedy hospital bills and lost hourly wages due to accidents.  This process kept the courts out of the process, saving time and money for drivers as well as insurers.

At least that was the way the system was meant to operate.  Scammers quickly found loopholes in the system to defraud Florida car insurers out of over $1 billion annually, costing all Florida drivers over $3.5 billion in rising PIP premiums to make back those losses.

Governor Scott and the Florida legislature attempted to remedy the situation with PIP Reform 9.0 in 2012, which limited claims for non-emergency situations to $2,500.  These amendments were expected to save insurers as much as $2 billion every year.

But the legislation had its flaws.  One of the chief sponsors of PIP Reform 9.0 wanted to pass the savings onto drivers immediately by imposing mandatory rate cuts of 25 percent in 2014.  However, Scott refused to make the cuts mandatory and insurers subsequently found ways to profit from the savings rather than cut their rates charged to drivers.

Other senators say that if they are reelected, they will amend PIP Reform 9.0 in an attempt to abolish PIP premiums entirely.  Bodily Liability Coverage is mandatory in most states, and many Florida drivers opt into that policy on their own – eliminating the need for PIP.  These senators say they will need the support of either Crist or Scott as Governor to move forward with their plans, hinting car insurance will become a hot button issue in the final week of the campaign.