Personal Injury Protection Insurance Reform Bill Advances in Florida House

A bill that would make significant changes to Florida's beleaguered personal injury protection no-fault automobile insurance coverage system is moving forward in the Florida House of Representatives. The House Civil Justice Subcommittee passed H.B. 119, without amendment in an 11-4 vote.

The bill will now be referred to the House Economic Affairs Committee.

Under H.B. 119, the new system would require people injured in auto accidents 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 accident. It also gives insurance companies more authority to conduct investigations into suspected fraud.

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 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).

The industry has largely supported H.B. 119.

Willem Rijksen, a spokesman for the American Insurance Association, said his organization views the creation of an emergency care coverage system as a major step in eliminating fraud and abuse within the current system.

"With escalating PIP costs due to fraud continuing to be a problem, advancing this legislation is a top priority for AIA," Rijksen said.

The Florida Senate is considering a separate bill that also targets fraud in the PIP system. State Sen. Joe Negron, R-Stuart, has introduced S.B. 1860, which would create a fee schedule for reimbursements and give hospitals priority standing in PIP claims (Best's News Service, Jan. 11, 2011).

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: jeff.jeffrey@ambest.com)