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Latest changes in car insurance legislation
The role of car insurance legislation is often underappreciated by most customers, who believe that it only serves the interest of insurance companies. However, if you come to think of it and take a closer look at some of the latest changes in car insurance legislation it becomes apparent that it's not all "black and white". Sometimes the initiatives proposed by some lawmakers actually carry the best of intents and are aimed at protecting the interests of simple people. Nevertheless, the initial intent doesn't always work out the way it was planned or the insurance companies simply find their ways around the new regulations, successfully earning money off their clients. With this perspective in mind it's really interesting to see what the latest change to car insurance regulations in Florida will lead to.
In 2012 a group of local lawmakers fronted by none other than the Florida Governor Rick Scott have proposed a set of changes to the insurance legislation that would address the pronounced problem of insurance fraud. Over the last decade Florida saw a dramatic increase in insurance fraud cases that abused the Personal Injury Protection part of most insurance policies. That's why the lawmakers have introduced more rigorous regulations on this specific part of car insurance, which should reduce the number of fraudulent claims and generally reduce the cost of insurance.
First of all, the maximum amount of PIP was reduced to $10,000, which should automatically reduce the cost of this coverage option. But the more drastic change involves a much more rigorous review process, according to which only real emergency medical conditions will be eligible for the upper limit of PIP. All other types of injuries that don't fall into the EMC category will receive only up to $2,500 of coverage. Moreover, the period of time during which the victim will be able to claim for PIP coverage was limited to 14 days after the accident. And the will also be a detailed registry of medical facilities and professionals that will be entitled to provide services covered by PIP coverage. These strict measures are aimed to eliminate the phenomenon of acupuncture and "alternative" medical practitioners claiming payments through PIP coverage and reduce the overall number of people who abuse this coverage option and use it with fraudulent intents. It all looks nice on paper and in theory, but as we saw in Wisconsin in 2011 even the most positive intense can turn into a mess when applied incorrectly.
The 2011 Wisconsin car insurance legislation changes are still widely disputed and criticized by both customers and insurance experts. The official intent of local lawmakers was also to reduce the average cost of car insurance for customers. However, they didn't think much at all and just decided to reduce the minimum required amounts of liability coverage by half. As a result, the "cheaper" car insurance policies that carried only the minimum liability coverage turned out to be generally insufficient for covering even an average accident, requiring more money to be paid by the victims out of pocket, which ultimately led to even more expenses by the party that suffered the most. Besides, the bright folks in the Wisconsin legislature have decided to review the provisions of uninsured/underinsured motorist coverage. Under the new law, customers who had several policies (either for multiple vehicles or multiple drivers within the household) were entitled only to a single maximum amount of uninsured motorist coverage even if they paid multiple premiums and had this coverage included in all of the policies. That's a good example of how law changes can go wrong and cause only problems to ordinary customers, even if they were made out of the best intents. Whether the new Florida initiatives will go the same path or actually serve some real benefit only time will tell.