Monday, August 27, 2007

FL car drivers lose Oct 1 no fault protection

Florida's going to be losing no fault insurance by Oct 1 if state lawmakers don't act fast. There has been outspoken criticism of the no fault insurance law for over 30 years. State Farm for instance wants to remove the law so they could pass the savings to their customers. The problem though, is that it will no doubt increase court costs and would require consumers to spend more time in court just to get a claim.

At the moment, if you were in an accident, each insurance company would be entitled to pay for their own customer. If the no fault insurance law is removed, the court must find which person was at fault through a lengthy and often expensive court case.

Here's the winners and losers if the no fault insurance law expires without legislative action this October:

  • Lawyers would have more work.
  • Larger insurance companies could advertise lower rates.
  • Drivers that defy statistics and don't have accidents will have lower rates.

  • Doctors and outpatient clinics wouldn't be paid immediately until the court figures out which insurance company is at fault. Drivers may be denied treatment.
  • Drivers that have an accident and get injured would have to wait for the court to get compensation for loss wages and injuries.
  • Small insurance companies would effectively shutdown as their legal fees increase. Larger insurance companies would be able to gain market share, effectively reducing competition.

Bottom Line
There is no magic solution to the no fault law. They could perhaps reduce the no fault PIP requirement (from $10,000 to $5,000) to reduce insurance rates, but still keep the law (a compromise of both camps). Either way, this fair law, will disappear if you don't let your state legislators know your opinion.

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