SEBRING - If Highlands County drivers noticed a slight decline in this year's automobile insurance rates, that was their PIP.
It took two years to implement, but most insurers calculated rates using a Pinnacle study, which projected that reforms contained in HB 119 would save 14-24 percent in Personal Injury Protection premiums.
Instead of establishing who is at fault in an automobile accident, PIP - also called no-fault insurance - provides injured drivers up to $10,000 of immediate medical coverage. The goal is to reduce court cases and payment delays for injured drivers.
Although PIP coverage makes each driver responsible for his or her own injuries in an accident, and although the number of drivers and auto accidents has remained constant, the number of PIP claims and PIP payments skyrocketed in previous years. The National Insurance Crime Bureau listed several Florida cities with the highest amount of "questionable claims" nationally.
"There is a lot of fraud in the system," then-State Rep. Denise Grimsley said in 2007. At the time, the PIP law was expiring. "I don't know if it can be revamped."
While PIP premiums represent roughly 2 percent of Florida's collected insurance premium, the issue accounts for nearly 50 percent of fraud referrals. The Division of Insurance Fraud received over 3,000 PIP fraud complaints in 2005-06, and obtained 225 convictions in 2007.
In her last House term, Grimsley, R-Sebring, voted for HB 117 reforms. HB 117 required health care clinics to be licensed to receive PIP reimbursements and ended unfair claim settlement practices.
The result: in Highlands County, Allstate Insurance Co. reduced its PIP rates 21.4 percent. Another Allstate company, Esurance Property & Casualty Insurance Co., reduced PIP 20.9 percent. Progressive American reduced rates 32.3 percent and Progressive Select went down 34.6 percent.
Overall, though, Allstate raised other portions of its insurance policy coverage to lower its overall rate 0.9 percent. Esurance's overall reduction was 17 percent, Progressive American reduced 11.7 percent and Progressive Select went down 15 percent.
State Farm Mutual Auto Insurance shaved only 1.7 percent in PIP, 3.3 percent total in Highlands County.
Travelers Home & Marine Insurance showed a 13.9 percent increase, 13.5 percent increase overall.
PIP insurance accounts for about 25 percent of a consumer's total auto insurance premium cost; therefore, a statewide average decrease of 13.2 percent in PIP will result in an overall reduction of 3-4 percent for a policyholder depending on the coverage purchased, the DOI said.
A preliminary DOI analysis of the rates submitted by the top 20 automobile insurance companies writing PIP insurance, encompassing more than 75 percent of the Florida market, showed a 13.2 percent decrease.
DOI's analysis was compiled to demonstrate the cumulative effect of House Bill 119 after the first required rate filing due in October 2012 and the second rate filing on Jan. 1, 2014. DOI Deputy Director of Communications Amy Bogner said rate changes are still pending for 2014.
"The anticipated cumulative effect of these two rate filings in the legislation was a 25 percent overall decrease in PIP rates," Bogner said.
Auto insurers that did not decrease PIP premiums by the cumulative 25 percent were required to support and justify the reason the company's savings should vary.
Grimsley gave the new law faint praise.
"Like any major effort, it takes time," Grimsley said Saturday. "We haven't fully prevented insurance fraud, but we're making headway. This law is helping honest consumers, and that's exactly its purpose. Florida auto insurance rates are starting to come down, and that's an indication that we're heading in the right direction."