Florida Renews No-Fault Auto Insurance Battle
Aug. 23--A Vero Beach lawmaker said Wednesday she will again file a bill to repeal Florida's no-fault car insurance system, but with key differences compared with a Senate bill introduced days ago, setting the stage for the biggest potential change in motorist coverage in almost 50 years.
At stake: whether Florida drivers can save up to $1 billion a year by ending the no-fault system. It imposes what many drivers see as a fraud-riddled, costly and unnecessary duplication of their health insurance, while allowing at-fault drivers to escape responsibility for harm they cause.
SB 150 by state Sen. Tom Lee, R-Thonotosassa, repeals the state's Personal Injury Protection system and makes drivers buy bodily-injury liability coverage, but retains a mandatory $5,000 in medical payments coverage. That last part is a significant point of contention.
Last spring, the House voted 89-29 to repeal PIP without requiring medical coverage. Sponsor Rep. Erin Grall, R-Vero Beach, said then the problem with mandating medical payments coverage is it essentially renames PIP and wipes out most driver savings.
Grall said this week she plans to refile similar legislation to repeal PIP and require bodily injury liability coverage of $25,000 per person and $50,000 per incident, but leave medical insurance as optional for the consumer.
"Florida's auto insurance laws have inadequate financial responsibility requirements," Grall told The Palm Beach Post. "Because of this, drivers and taxpayers are hit with millions of dollars a year in additional costs and higher insurance premiums."
Grall said, "Floridians deserve meaningful coverage -- similar to coverage requirements in 48 states that already require bodily injury coverage."
Florida drivers are required to buy some of the lowest coverage amounts in the nation, including $10,000 in PIP to cover a driver or passengers's injuries regardless of who is at fault in an accident. Yet they pay among the eight highest average premiums, and PIP premiums shot up 25 percent in 2015 and 2016.
An actuarial study commissioned by the state found drivers could save up to $81 per car, or close to $1 billion collectively, by repealing the state PIP requirement, even with projected increases in bodily injury liability premiums.
Defenders of the no-fault system, from hospitals to attorneys who specialize in PIP, have supported keeping the mandate to buy such coverage.
State Rep. Julio Gonzales, R-Venice, and an orthopedic surgeon, said last spring he admits the PIP system is "broken," but he opposed the House bill because at least PIP ensures medical providers can count on some basic level of reimbursement. About 13 percent of Floridians do not have health insurance according to some estimates, though hospitals are required to treat them in an emergency.
A Senate version similar to Lee's refiled bill never got to a vote in the full chamber there.
Why not? Asked by The Post if he personally opposed a PIP repeal bill, Florida Senate President Joe Negron, R-Stuart, said in July, "No, the bill didn't pass through all the committees of reference."
Florida is one of two states that do not require bodily-injury liability coverage, Grall emphasized on the House floor last spring. That means drivers are not required to take responsibility for injuring others when they buy insurance.
Two dozen states have concluded no-fault systems are costly if well-intended failures in recent decades and dropped them, leaving Florida among a dwindling handful of states with such requirements. Colorado drivers saved 35 percent on their overall car insurance premiums after dropping a no-fault plan.
Senate and House sponsors agree the system needs to go. The difference is how.
"While well intentioned anecdotally, Florida's Motor Vehicle No-Fault Law has resulted in widespread fraud, abuse, and a complex litigation process," Lee said. Since its enactment in the 1970s, he said, "the value of the PIP benefit has eroded, while Florida's auto insurance premiums continue to rise."
Under the Senate bill, Floridians would be required to purchase bodily injury liability coverage at limits of $20,000 per person and $40,000 per accident, $10,000 for property damage, and $5,000 in medical payments coverage.
"More than 92 percent of Florida drivers currently have some form of bodily injury coverage," Lee said. "For many, PIP is a duplicative coverage that burdens drivers with paying for accidents they didn't cause. Good drivers are being punished by having to cover rate hikes, even if they never get in an accident, to pay for the negligence of other drivers and the general PIP costs in their region."
SB 150 phases in bodily injury liability coverage requirements over time until it reaches $30,000 for one person and $60,000 per incident.
"The legislature tried year after year to fix Florida's overpriced, no-fault system," Lee said. "By switching to a tort-based system, we increase the simplicity of litigation, provide more adequate liability coverage at a reasonable price, and preserve some important protections for healthcare providers."
Still, the Senate bill forces drivers to pay for medical payments coverage no matter how much health insurance they have from Medicare, employer plans or other health coverage. But it's not harmless "extra" coverage, as many exasperated drivers see it. It's a source of runaway costs they have to pay even if they never get in an accident.
What are some potential solutions if the Senate and House differ on requiring medical payments coverage? One is requiring insurers to offer the coverage but not forcing drivers to buy it, as some states do. Another is allowing drivers to opt out of medical payments coverage if they can demonstrate they have qualifying health coverage.
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