While neglecting vehicle maintenance costs the economy over $2 billion each year, most Florida residents are tied down by expensive policies that prevent them from buying important auto insurance and making regular repairs.
So to make driving in Florida more affordable, State Senator Jeff Brandes is hoping to remove the PIP program from state legislature. PIP, which is a personal injury protection that covers minor accident claims, has been required under state law since 1972.
The problem is that because PIP is mandatory, all Florida drivers must carry a policy costing at least $10,000. The idea behind this was that if all drivers carried this basic amount on their insurance plan, this “no-fault insurance” would be able to quickly resolve small claim issues that were clogging up the courts.
But it is simply too expensive. Reports show that a simple repeal of PIP could save drivers at least $81 dollars per year on auto insurance. While this may not seem like a high number, it can easily deter car buyers from purchasing a car outright, making them settle for leases which are more expensive in the long run.
“PIP is a broken insurance system, and it does not reflect the reality of Florida’s transportation future,” Brandes said in statement. “PIP fraud impacts every driver in our state, and no proposal is more effective at reducing premiums than a full repeal of PIP. It’s time to finally bring substantive reform to the automobile insurance market,” the Bradenton Herald reports.
As a whole, PIP has gotten more expensive within the past year. Between January 2015 and 2016, rates rose by 15%. One carrier, Allstate Fire and Casualty, has raised PIP by 40%.
The PIP repeal has been filed for the 2017 legislative session. It is important to note that the repeal has similar proposals as others that have been blocked in the past, but Brandes is hopeful, as his plan will save the state over $1 billion annually.
