Filing Data Shows Florida PIP Reform’s Effects on Rates

The effect of no-fault coverage reform is taking shape as the Florida Office of Insurance Regulation (FLOIR) released more data this week from the rate filings of large-scale insurers, which are supposed to reflect cost savings from the provisions of the reform law.

Insurers in the state were required by lawmakers who overhauled the personal injury protection (PIP) system to reduce PIP rates by 10 percent following the reforms or explain why they couldn’t do so. The changes needed to be reflected in the Oct. 1 rate filings.

The data showed that three of the five largest Florida car insurers are proposing to cut PIP rates by a full 10 percent, while the remaining companies’ subsidiaries will either post smaller decreases or see an increase in rates.

The PIP portion of a policy accounts for about 20 percent of the average policy premium, according to the FLOIR.

GEICO, Progressive, USAA and their subsidiaries all asked for the mandated 10 percent cut.

State Farm Mutual, the only insurer that asked for an increase, is asking regulators for approval to hike PIP rates by 7.9 percent. The company justified the request in its filing by saying its financials and loss projections showed it was justified in asking for up to a 22 percent increase, so the 7.9 percent increase was at least 10 percent lower than what they could have asked for.

The largest Allstate companies did not have uniform rate change requests.

Citing reasons similar to State Farm’s, Allstate Fire & Casualty said that it could have asked for an 11.2 percent increase but instead asked for no change.

Allstate Property and Casualty is asking for a rate decrease of 5.8 percent, which it says reflects a 10 percent decrease from the rate change it could have justifiably asked for.

The latest data provided by regulators “is only a sampling pulled from those filings to give the general public an idea of how the top ten auto insurers had filed,” according to Amy Bogner, spokeswoman for the FLOIR.

The filings “are still pending a review and analysis by our office,” she said.

Currently, nine rate filings from smaller insurers have received approval, according to the FLOIR.

When regulators released that data, they noted only a few had implemented the minimum 10 percent cut.

“Although it initially appears the savings will result in a mitigation of rate increase rather than actual rate reduction for most companies, it does represent a major shift in the trajectory of PIP insurance rates in Florida,” Insurance Commissioner Kevin McCarty said in a statement released along with that first batch of information.

PIP rate filings are supposed to show a 25 percent PIP rate decrease from mid-2012 rates by 2014.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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