Florida Lawmakers To Consider Replacing PIP Insurance

Jan. 10--Is it time for Florida to repeal its decades-old requirement that all drivers carry personal-injury protection coverage?

That question looms again as elected lawmakers convene in Tallahassee for this year's legislative session.

A trade group of plaintiffs attorneys, the Florida Justice Association, has for the second straight year identified repeal of PIP -- also known as no-fault insurance -- as one of its top legislative priorities.

A repeal would move Florida into the ranks of the so-called tort system with 38 other states.

Proposed repeal of the no-fault system would eliminate caps on liability and establish that a driver who causes a crash be held responsible for paying for medical treatment, pain and suffering, and legal fees along with property damage of other injured parties. Currently, awards for pain and suffering can only be recovered in cases involving death or significant and permanent injury, according to a legislative analysis.

The full House is expected to vote on a version of the repeal bill as early as this week, while a Senate version is scheduled for debate by that chamber's Banking and Insurance committee on Wednesday.

Both bills would swap a requirement that drivers purchase coverage for treatment of their own injuries with a mandate to buy liability insurance covering injuries to occupants of the other vehicle.

Most drivers currently maintain liability insurance in case they cause an accident that hurts occupants of other vehicles. But Florida's no-fault law only requires purchase of liability coverage by drivers previously involved in a crash or convicted of certain traffic offenses.

Dale Swope, president of the trial lawyers' organization, said the state has a "moral imperative" to require insurance that will fund costs and recovery of people injured in crashes. Despite 2012 PIP reforms meant to lower premiums overall, Florida has the sixth highest average auto insurance rates in the nation, Swope said.

A key difference between the Senate and House bills is the Senate bill would also require drivers to buy up to $5,000 in emergency medical (MedPay) coverage for themselves, while the House bill has no such requirement.

Both bills would eliminate the PIP requirement that vehicle drivers buy at least $10,000 in coverage for bodily injury or death of one person in a single crash and $20,000 for bodily injury and death of two or more persons, along with at least $10,000 for damage to the other vehicle.

Instead, motorists would have to purchase higher amounts of bodily injury coverage in addition to at least $10,000 for property damage. The House version would increase bodily injury coverage to at least $25,000 for injury or death of one person and $50,000 for two or more persons beginning next Jan. 1.

The Senate version would phase in coverage mandates over time and, by 2023, require motorists to maintain $30,000 in coverage for injury or death of one person and $60,000 for two or more persons.

Under the Senate bill, premium savings from swapping PIP for MedPay coverage would largely be offset by added costs of liability coverage and uninsured motorist coverage, though amounts would vary by county of residence, according to a Senate staff analysis. For instance, consumers in Miami-Dade County would pay $121 less than they would currently pay if purchasing PIP and bodily injury coverage by 2021 and 2022, but a driver in Alachua County would pay $30.22 more.

Without MedPay, PIP repeal would reduce average auto insurance premiums about $81, according to a 2016 analysis commissioned by the state Office of Insurance Regulation.

Supporters of the MedPay provision say replacing mandatory no-fault coverage with more expensive liability coverage would increase the number of drivers who choose to drive without any insurance. The $5,000 MedPay mandate would ensure hospitals would not be left uncompensated for treating uninsured crash victims.

Michael Carlson, president of the Personal Insurance Federation of Florida, a lobbying organization whose members include Allstate, Progressive, State Farm and Farmers, said the organization opposes the Senate version because the MedPay requirement would amount to an unnecessary tax on the majority of drivers who already have health insurance that covers emergencies.

The federation thinks any PIP reform should also include reforms to the state's "bad faith" laws, Carlson said, which allow separate lawsuits by trial lawyers and third-party claimants against insurers based solely on the way insurers handle claims.

"If the Legislature repeals PIP and Florida's very creative litigating class says, 'I'm going to sue' every time, it will lead to increases in auto insurance costs," Carlson said.

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