Bill To End PIP ‘Double Tax’ Passes Florida House Subcommittee

March 28--After almost half a century, Florida drivers would no longer be forced to pay for fraud-prone and costly no-fault car insurance that duplicates their health coverage under a bill that passed a state House subcommittee 12 to 2 on Monday.

"I think it's time and there is public outcry," said its sponsor, state Rep. Erin Grall, R-Vero Beach.

Drivers would save an average of about $81 per car even after paying for bodily-injury liability coverage, as HB 1063 requires and most states do as well, according to a state-commissioned actuarial study last fall. Some 24 states have dropped no-fault systems in recent decades, but Florida has hung on to its program, which started in 1971.

The bill has a long way to go, but if approved by lawmakers and signed by the governor, would take effect Jan. 1, 2018.

Some drivers have called it "double taxation" because PIP needlessly duplicates medical coverage they already have from health plans including Medicare.

"It's absolutely ridiculous," driver Dick Natalizio of Palm Beach Gardens told The Palm Beach Post last month. "In Colorado, they got rid of no-fault and their premiums went down 35 percent."

The bill replaces Florida's requirement for $10,000 in Personal Injury Protection that covers injuries regardless of who is at fault. It would require bodily-injury liability coverage of $25,000 per person, or $50,000 for two or more persons. Some 93 percent to 95 percent of Florida drivers already buy some level of BI coverage, supporters said.

Still, it would represent a big sea-change and the bill faces considerable resistance after more than four decades. Several legislators congratulated Grall for having the "courage" to bring it up. Opposition from several industries was evident at Monday's insurance and banking subcommittee hearing.

Many medical providers want PIP replaced, if it all, with a similar amount of required "medical payments" coverage.

"One thing PIP does right is it does give drivers some access to quick payment to cover emergency medical expenses," said Fraser Cobbe, representing the Florida Orthopaedic Society.

But requiring "medpay" essentially renames PIP and wipes out most of the savings, HB 1063 supporters said.

"I do believe that medical payments is a duplication for people who already have health insurance, " Grall said.

Representatives of insurance companies, including State Farm and Nationwide, expressed support if the legislation comes to include reforms to "bad faith" laws they say will bring down legal costs. .

Some legislators questioned the need to attach that to the bill as "bad faith" reforms would increase driver savings less than 1 percent, according to last fall's study. The Pinnacle Actuarial Resources study projected average savings of 9.6 percent on liability coverage and 6.7 percent on the overall car insurance bill for drivers by dropping PIP.

Florida drivers pay among the nation's five highest car insurance premiums for some of the lowest required coverage, a state Senate panel heard in January. Drivers often pay up to a quarter or more of their total car insurance bill for just $10,000 of PIP coverage.

The state's 2012 attempt to fix PIP reduced non-emergency benefits to $2,500, but that merely saw more claims suddenly billed as emergencies -- from 40 percent to 96 percent, repeal supporters said.

Meanwhile, PIP rates continue to rise. They have shot up an average of 25 percent since the start of 2015. Drivers have no choice but to pay the rising premiums even if they never get in an accident.

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