The readers’ forum

Where are the PIP savings?


Everyone wants to know when the savings are coming from the Personal Injury Protection (PIP) reform law enacted in 2012. PIP is a money-loser for car owners and insurance companies. According to a recent Florida Office of Insurance Regulation study, insurers pay an average of $1.15 in losses and expenses for every dollar collected.

And, the courts aren’t helping. An amendment to the 2008 No-Fault Act permitted insurers to limit reimbursement for PIP medical expenses to twice what Medicare Part B pays. However, medical providers continue to charge PIP insurers as much as six times the rate and persuade the courts to OK the bills.

In 2012, the Third and Fourth District Courts of Appeal ruled that insurers cannot limit reimbursement to that schedule unless they change all policies. Then, one court declared the amended policies to be ambiguous and disallowed the lower fee schedule. Hence, no one is saving money. Most of the 2012 amendments went into effect Jan. 1. They apply to new and renewed policies, not existing ones, so it will take all year to affect every driver.

For claims filed under the new rules, it remains to be seen whether the courts will allow insurers to use the new amendments. A class-action lawsuit is challenging the constitutionality of the payment restrictions for massage therapy and acupuncture, and websites are sprouting up with docs-for-hire to sign off on chiropractor claims.

The Legislature sought to limit plaintiff attorney fees, but certain county court judges have circumvented that by simply increasing hourly rates. Now, most PIP lawyers collect $400-to-$500 per hour. Based on what has happened in the courts, we don’t have high expectations that the 2012 amendments will provide an immediate cost savings. It could take years for the courts to sort through the legal issues.

We’ve been in this business long enough to know that nobody sheds a tear when an insurance company is forced to pay out more money. But while some judges may believe they are taking money from a deep-pocketed insurance company to help out the little guy, they are unwittingly destroying the PIP system by allowing PIP clinics and attorneys to gouge PIP insurers, deplete the risk pool and drive up premium rates. Unless something is done to fix the courts, PIP will continue to serve as a retirement fund for fly-by-night clinics and the lowest level of plaintiff attorneys.

In the meantime, we’ll try to conduct business according to the new PIP law. The savings will come if the law is enforced the way it was written.

Richard Parrillo Sr., chairman and CEO, United Automobile Insurance Co., Miami Gardens

Read more Letters to the Editor stories from the Miami Herald

  • The readers’ forum

    Miami Dade College has critical unmet financial needs

    The recent exchange of words between the president of Miami Dade College and some members of the Miami-Dade legislative delegation was unfortunate, but it has focused our community’s attention on the critical unmet financial needs of MDC. I’m confident that our legislative leaders will rise above the fray and do what is right for our community.

  • Go Heat, but . . .

    Your April 17 story The Heat Unites Us was very optimistic, and that is admirable and to be expected for journalists at a local newspaper like Miami Herald.

  • Restore libraries

    There’s an important perspective to be added to the April 11 article Without more tax dollars, Miami-Dade library system would fire more than half its full-time staff.

Miami Herald

Join the

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Marketplace

Today's Circulars

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category