The Florida Legislature is moving forward with efforts to reform the state's beleaguered personal injury protection no-fault automobile insurance coverage system. The State House Insurance Subcommittee has passed a bill that would replace the existing mandatory no-fault PIP coverage system with emergency care coverage.
Under H.B. 119, the new system would require people injured in auto accidents to go to the emergency room to be checked out. The new system is designed to end fraud by requiring hospital physicians to diagnose most injuries within 72 hours of an auto accident. It also gives insurance companies more authority to conduct investigations into suspected fraud.
The Florida Senate is also considering another bill targeting fraud in the PIP system. This week, State Sen. Joe Negron, R-Stuart, introduced S.B. 1860, which would create a fee schedule for reimbursements and give hospitals priority standing in PIP claims.
The proposed changes come at a time Florida's existing PIP system has been criticized by both Republicans and Democrats for allowing rampant fraud to take place in the state. Some estimates say the fraud costs Floridians $1 billion annually.
Florida's no-fault auto insurance, designed to quickly provide benefits for people injured in accidents regardless of fault, was implemented in 1972. Florida drivers are required to carry PIP coverage, which provides $10,000 per person for medical bills. Ron Poindexter, director of operations for the Southeast with the National Insurance Crime Bureau, has said the $10,000 per individual PIP coverage, with 11 million cars in Florida, is "a huge pot of money" that unscrupulous individuals are using as their "personal slush fund" (Best's News Service, Jan. 31, 2011).
Florida tops all states in the United States for staged accidents. Questionable claims for staged accidents in Florida totaled 2,779 last year, up 39% from 2009, according to the National Insurance Crime Bureau.
In Florida, the average PIP claim cost per vehicle shot up 62% from 2008 to 2010. No-fault claim frequency in Florida rose 32% (Best's News Service, Dec. 29, 2011).
The insurance industry, which has been pushing for no-fault reform in Florida for years, came out in support of the House subcommittee's passage of H.B. 119.
The American Insurance Association said in a statement that it supports repealing PIP and views the creation of ECC coverage as a step in eliminating fraud and abuse.
"AIA is pleased that the House is proceeding with legislation which will curb escalating systemic fraud and abuse," Ray Farmer, AIA Southeast region vice president, said in a statement. "AIA supports the repeal of Florida's broken PIP system. We commend members of the committee for taking action which will result in greater medical coverage for those injured in automobile accidents."
The top five private-passenger auto writers in Florida last year were State Farm Group, with a 20.79% market share; Berkshire Hathaway Insurance Group, with 16.22%; Allstate Insurance Group, with 13.94%; Progressive Insurance Group, with 10.89%; and USAA Group, with 5.61%, according to BestLink.
(By Jeff Jeffrey, Washington Correspondent: [email protected])