Florida motorists could soon see average savings of more than 13 percent on their personal injury protection (PIP) rates as a result of recent reforms, according to insurance regulators. That would translate to a broader reduction of 3 to 4 percent on overall car insurance bills.
The estimates come from a Wednesday report from the Florida Office of Insurance Regulation (FOIR), which included preliminary estimates on the rate increases and decreases triggered by HB 119, a piece of reform legislation that lawmakers passed in 2012 to tamp down fraud and roll back eligibility for PIP coverage.
Under PIP coverage, car insurers cover treatment for their own policyholders’ accident-related injuries, regardless of who caused the crash.
According to the FOIR, PIP coverage usually accounts for about a fourth of Florida auto insurance premiums, or “only a small portion.”
Regulators’ estimate of 3 to 4 percent average savings to overall auto premiums doesn’t apply to all drivers; actual impact on a driver’s premiums depends on the type of coverage in his or her policy, according to the FOIR.
Larger Market Shares, Larger Estimated Rate Drops
Florida car insurers that showed the largest cumulative drops in PIP rates also had larger shares of the car coverage market. The 20 largest auto insurers are expected to drop PIP premiums by about 13 percent and overall premiums by 1.2 percent.
GEICO, with more than 18 percent of the market, showed a 25 percent drop in PIP rates, one of the largest drops among insurers.
Progressive, which FOIR reported had a 11.6 percent market share, showed the largest PIP rate decrease: approximately 33 percent.
State Farm, which has 17.5 percent of the state market, reported estimated drops of 1.7 percent in PIP rates and 3.3 percent in overall auto premiums.
PIP premium reductions mostly occurred for insurers with larger shares of the Florida car insurance market.
The FOIR also reported that PIP rates could increase at five of top 20 car insurance companies. However, those estimated increases to PIP rates were outbalanced by estimated decreases that were reported for 15 car insurers that held larger shares of the marketplace.
For example, the estimated 58 percent increase to PIP rates at 21st Century Centennial was the largest increase among the top 20 insurers in the report, but the insurer had only about 2 percent of the market.
Report on Rate Filings Is Follow-up to 2012 Filings
The latest report offers a fuller picture of the impact of PIP reforms since car insurers submitted rate filings in October 2012 that was required by HB 119.
If the current estimate of 13.2 percent in statewide average rate savings for PIP coverage holds firm, it would lie just outside the range of 14 percent and 24.6 percent in savings that a state-commissioned study estimated would occur because of HB 119.