Statement by The James Madison Institute
Regarding the October 1 Deadline for PIP Rate Reductions
Today was the deadline for insurance companies to file their new PIP rates reduced by 10% or explain why they have not done so. Although some companies may be able to meet this reduction deadline, it will be legitimately premature for many others. For the companies unable to meet the October 1 deadline, the immediate effect of the PIP reforms will be reflected in the mitigation of existing, escalating rates with the full 10% reductions not evident until after several variables have been resolved.These variables include:

Most of the reform provisions do not take effect until January 1, 2013 after which policies will be gradually impacted as they are renewed or are newly written. Therefore, for many consumers, savings may not be realized until July 1, 2013 or after.
The largest savings are likely to stem from the two provisions that limit non-emergency conditions and exclude massage therapists and acupuncturists. These provisions are facing legal challenges, which could delay implementation of–and/or cause a reinterpretation of–the reforms.
Litigation will force insurers to incur legal costs that could delay savings for consumers.

In the interim, The James Madison Institute continues to recommend caution regarding unreasonable expectations for immediate, across-the-board rate reductions and encourages consumers to take this opportunity to compare rates and coverage and allow a dynamic insurance market to work to their advantage.