Decrease in Insurance Premiums…MaybeThe new law, which goes into effect in July, requires insurance companies to lower insurance rates, with a 10% reduction by October 1 and a 25% reduction by January of 2014, as compared to rates as of July 1 of this year. However, this requirement falls somewhat short of a legal mandate, allowing insurance companies to not lower rates provided they explain why they didn’t.
Decrease in Insurance Benefits…DefinitelyThe idea behind the “reform” is that these measures will decrease insurance fraud, and the insurance companies will be able to pass their savings on to the consumer. It remains to be seen how effective this will be. You’ll know in October when you receive your insurance bill and can see for yourself if your premiums have been lowered and by how much. In the meantime, we do know for sure about some of the other changes made by the law and how they will affect people injured in car accidents. Some of these changes include:
- Medical benefits can be denied if you fail to receive “initial services and care” within 14 days after the accident
- Benefits can be denied if you refuse to submit to an examination under oath about your claim
- Your $10,000 in PIP benefits will be capped at $2,500 unless your injuries meet the definition in the bill of an “emergency medical condition”
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