Insurer wants to cut rates
State Farm says customers who eliminate PIP coverage can save about 16 percent.
By HELEN HUNTLEY, Times Staff Writer
Published February 20, 2007
State Farm said Monday it wants to cut its auto insurance rates an average of 16 percent statewide, assuming Florida's no-fault insurance system expires on schedule at the end of October.
Since State Farm is Florida's largest auto insurer, its decision will have a big effect: Florida drivers with State Farm coverage will save about $435-million by eliminating the $10,000 in personal injury protection, or PIP, required under law.
Other companies may follow.
The typical two-car household will save $360 a year under the new rate, State Farm said. Medical coverage would be available as an option, but households that bought it would pay less than they do for PIP coverage. Some will ignore it because they have other health insurance coverage.
"Floridians are overpaying for PIP coverage because it is rife with fraud and abuse," State Farm spokesman Justin Glover said.
State Farm wants to get rid of the no-fault system and its rate filing is contingent on that happening. However, the Florida Legislature could vote to extend no-fault or change it. Elimination would mean the end of restrictions on the right to sue if you are injured in a car accident.
Although no-fault was touted as a way to lower rates, it hasn't worked out that way. Florida car insurance rates are among the highest in the country.
The optional health coverage will have a fee schedule that limits payments for medical services.
Helen Huntley can be reached at email@example.com">href="mailto:firstname.lastname@example.org" mce_href="mailto:email@example.com">firstname.lastname@example.org or 727 893-8230.