The drivers of the state of Florida right now are so confused and rightfully so. There has been a bitter fight, insurance company and insurance company vs. insurance company and medical professionals vs. medical professionals and Lawyers vs. Lawyer and insurance company… and verses and verses. All this, while the poor driving public of Florida is caught in the middle and is helpless and most clueless of what is happening.

To start lets find out just what the heck is PIP.

The Basics

First states are generally broken up into two categories, Tort States and PIP States. If you live in a Tort state things are a bit less complicated and easier to understand. In a nutshell if you are in a car accident and you are “At Fault” then you are responsible for the injuries of others. You will be sued for all, injuries to the other drivers, passengers and any property damage that you caused.

In a tort state it is absolutely necessary that you have liability insurance to pay for such damages and most states have a requirement of minimum liability such as 25/50/25. To translate that is $25,000 for Bodily Injury you do to one person in and accident, $50,000 Total per accident for Bodily Injury and $25,000 for Property Damage.

PIP States, out of fifty states at one time there was 38 states that were PIP States, today there are 12 er no, 11 er no effective January 1, when Florida “re-becomes” a PIP State 12 again.

What is PIP

Frankly, PIP is a lot more complicated than a tort. Why? First each state employs a different degree of PIP. In order to explain PIP we need to explain “PURE PIP”, which no state employs.

In a “Pure PIP” environment in any accident each person would take care of ALL their own injuries and a law suit against the other party would be prohibited by law. Hence, PIP is also known as “No Fault”. Theoretically each person would buy their own policy to pay for their injuries instead of suing the AT FAULT person. Hmmm, no lawsuits, you can imagine how attorneys would feel about that. That is just one drawback; the second is how much coverage each person should have under a “PURE PIP” environment. Because of this the remaining handful of PIP states have varying degrees of PIP.

Florida PIP

In 1971 Florida legislators passed the PIP law and no longer was it mandatory to secure liability insurance but at that time only one coverage was necessary to register your vehicle. PIP.

The Florida version of PIP every citizen of the state of Florida would buy this coverage and have a “bag of money” of $10,000 to take care of themselves for injuries resulting from “any” auto accident. Your coverage will pay no matter who was at fault.

The problems with this law were immediate. First it contradicted the Florida responsibility law which in short states that when a driver is involved in an accident that involves bodily injury or property damages to an extent that an auto is disabled you must prove you have liability limits of 10/20/10 or $30,000 of combined liability.

The second problem was the law did not address any “Property Damage” done by the at fault driver. That was remedied a few years after with the addition of $10,000 of mandatory property damage liability being added to the requirements to register your car.

Another problem was that of “Tort Immunity” or “Tort Exemption”. The problem, no one really understood it.

Tort What?

“Tort Immunity” also known as “Tort Exemption” is what PIP is all about. If you recall under “PURE PIP” you may not sue the at fault party, that is Tort Immunity. As we also mentioned each state has varying degrees of PIP and also varying degrees of “Tort Immunity” In order vary the tort immunity each state must define the limit of the immunity. States have either a Financial “Threshold” or Verbal “Threshold”. For example a person may not sue the other at fault person until their medical bills exceed $50,000, this would be a example of a Financial or Dollar Threshold.

Florida has a “Verbal Threshold” although each person is responsible for the first $10,000 of their own injuries regardless who is at fault, you can sue the “At Fault” driver for any economic damages you incur over the first $10,000 but, you will NOT be able to sue for any “non economic” injuries (such as Pain and Suffering) unless you “pierce” a threshold and this is Florida’s extent of “Tort Immunity”

What were the problems with PIP?

The spirit of PIP was quite noble, instead of suing everyone for small accidents the PIP coverage would cover “most” medical expenses, loss of work and even some household chores you were not able to do because of the accident. Thus there would be a reduction in lawsuits.

Well, although noble the law almost immediately added an new level of litigation and/or negotiation, that is determining whether a threshold had been crossed. The Florida verbal thresholds are : 1. Loss of a bodily function 2. Permanent injury 3. “Significant” scaring and 4. Death.

Death is the easiest threshold to determine, if a person is still breathing then obviously the threshold has not been crossed and the person can not sue for “non economic” injuries such as pain and suffering. But the other thresholds such as: Significant scaring may be harder to interpret. So much having fewer lawsuits.

I want you to think of the last time you were driving and drove by an auto accident. How many folks did you see in each car or van? At least 2, 6, 10 ? What ever the number multiply that number by $10,000.

The problem became “Fraud”. No matter how little the injury unethical medical practitioners bilked the companies. Artificially increased bills paid by insurance were ultimately passed on to us, insureds.

Florida’s Flip Flop

On October 1, 2007 Florida’s long suffering PIP law was laid to rest with many insurance companies bidding it a happy farewell only to be resurrected a few days latter at the behest of Florida’s governor.

Currently, as of today October 14, 2007 there is no PIP law in effect , no $10,000 bag of money to cover your medical expenses, no tort immunity actually not much of any kind of mandatory coverage until January 1, 2008 when PIP will be reinstated.

Many companies had scrambled to add a “Non Statutory” PIP to give everyone $10,000 benefits and we recommend at least that with at least $2,000 of Medical Payments and uninsured motorist.

Now would be a good time to contact your agent and review your coverages.

Christopher P. Kazor, CIC Lutcf is president of Nusurance Insurance agency http://www.nusurance.com He has been active in the insurance industry since 1978 and has been licensed as an insurance agent, adjuster, and insurance instructor. For more information call Christopher Kazor at 813 514 6982.
Nusurance Corp
813 514 6982
9280 Bay Plaza Blvd. Suite 706
Tampa, FL 33619
http://www.nusurance.com

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Have a great day!

I'm now 25 years old and have never had anything close to an accident. So naturally I carry liability only insurance for my automobile. Well 2 nights ago I hit a deer on the way home causing moderate front end damage to the car. How “illegal” would it be if I were to add comprehensive insurance to my policy, then wait a few days and make a claim?

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