Florida drivers could see a price drop of up to 25% of their premiums
Recently, the state of Florida made changes to the personal injury protection (PIP) coverage on automobile policies. With the changes in places, reports have suggested that Florida drivers could see a price drop of up to 25% of their premiums.
However, keep in mind other costs involved with insurance policies may offset the new price reduction. Florida insurance companies are hesitant to explain the new price reduction to consumers because it could potentially expose hidden prices listed as additional costs. For example, a recently revealed hidden was found to be an insurance fraud scheme, which ended up costing companies over a billion dollars.
Executive Director of the Florida Consumer Action Network, Bill Newton, explained recently that under new Florida Law, insurance companies are mandated to decrease Florida PIP costs by at least 10% by the beginning of October. If insurance companies fail to decrease rates, they must provide a legitimate explanation as to why the prices stayed the same or increased. Newton also explained that insurance companies need to be held accountable for any and all reasons why insurance premiums will not decrease:
“We should collect all these excuses from insurance companies and hopefully no one will say my dog ate it.”
However, the Florida State Office of Insurance Regulation (FSOIR) is concerned that the 10% decrease may actually increase the overall premium costs regardless of hidden or additional costs.
“This projected savings may actually mitigate premium increases, not reduce premium.”
The reasoning behind FSOIR’s recent statement is because in Florida, PIP represents 20% of a Florida driver’s total auto insurance premium. With up to a 25% reduction in PIP costs, this would mean that a total of 5% only would be reduced from the customer’s total price.
For more information regarding the new Florida PIP laws, visit the official Florida Department of Insurance website. You’ll also be able to compare different quotes and inquire with different companies regarding pricing and savings now that the new law is in effect.