R Street urges Florida auto insurance consumers to shop around
TALLAHASSEE, Fla. (Oct. 1, 2012) — Given today’s deadline for Florida auto insurers to submit personal injury protection rates that reflect PIP market reforms passed by the Legislature earlier this year, the R Street Institute encourages Sunshine State consumers to compare offerings to find the coverages and premiums that are right for them.
Under H.B. 119, auto insurers are required to file new rates for the “no fault” portion of private passenger auto coverage by Oct. 1, and to offer an explanation if they do not file a rate cut of at least 10 percent.
A report issued last month by the Florida Office of Insurance Regulation found that actuarially indicated PIP premiums should fall by 14 percent to 25 percent as a result of the legislation. However, because many auto insurers already file rates that are below the indicated rate, the end result may be to mitigate against rate increases.
“What we expect is that some rates will be cut by the full 10 percent, some will stay the same, and some may even rise, although not by as much as they would have without these reforms,” said Christian Cámara, R Street’s Florida director. “Insurers have less than half a year of data under the new system on which to base their rates; many of the provisions in the bill do not even take effect until next year; and uncertainty remains about what sorts of loopholes and litigation the new system will prompt. Just as the medical malpractice reforms the Legislature passed nearly a decade ago took some time to work their way through the system and produce savings, it will take some time for these reforms to work.”
In Florida, PIP premiums typically represent about 20 percent of the cost consumers pay for an auto insurance policy. According to Pinnacle’s report, some of the largest savings introduced by the bill stem from its provisions proscribing coverage for massage therapists and acupuncturists and its limitations on non-emergency conditions, which both take effect Jan. 1, 2013.
