Florida House renews debate over ending no-fault auto insurance system
Legislation would replace personal-injury protection with mandatory bodily injury coverage
TALLAHASEE, Fla. – Florida’s no-fault auto insurance system is again on the chopping block in the Legislature, despite industry concerns the proposed change wouldn’t lower premiums as backers contend and could increase lawsuits and health-insurance rates.
The House Insurance & Banking Subcommittee on Tuesday backed a measure (HB 771) that would replace a requirement that motorists carry personal-injury protection coverage ---key to the no-fault system --- with mandatory bodily injury coverage.
The House proposal also would require auto insurers to offer medical-payments coverage, known as “MedPay,” to consumers, taking a position the Senate has backed in the past. Such coverage could help pay medical bills if motorists are involved in accidents.
“We know that the PIP system is broken,” bill sponsor Erin Grall, R-Vero Beach, said. “There is extreme value in transitioning to a new system without adding additional layers of policy that may not be necessary.”
But in advancing the proposal, House members said more work is needed on the proposed MedPay coverage and issues related to “bad faith” lawsuits against insurers.
Subcommittee Chairman Bryon Donalds, R-Naples, said he wanted to see where the proposal goes as PIP is now being used as a “quasi-health care system.”
“For people in our state who just simply carry PIP just to get their insurance on the road, PIP in and of itself is not enough to deal with actual accidents when they occur on the roadways of Florida,” Donalds said. “If we actually look at the actuarial risks associated with auto accidents, no matter how else you feel about any other measure of this bill, it is clear that PIP is simply not enough.”
Bad-faith cases involve allegations that insurers have not properly looked out for the interests of their customers. Insurers and business groups have long lobbied to curb bad-faith cases.
A Senate proposal (SB 924) seeking to address bad-faith cases was postponed Tuesday because of a lack of time during a Senate Banking and Insurance Committee meeting.
Under the no-fault system, drivers are required to carry personal-injury protection, or PIP, coverage to help pay medical bills after accidents. Motorists are required to carry $10,000 in PIP coverage, an amount unchanged since 1979.
Lawmakers in both chambers have floated the idea of ending the no-fault system almost annually since trying to reform PIP sin 2012.
The House and Senate proposals would move away from the PIP requirement and, starting Jan. 1, mandate that motorists carry bodily injury coverage. The bills would require a minimum of $25,000 in bodily injury coverage for the injury or death of one person and $50,000 for injuries or deaths of two or more people. The proposals also would retain an existing $10,000 financial responsibility requirement for property damage.
Policyholders would also be given a chance to reject medical payments coverage starting at $5,000, with deductibles from zero to $500.
Grall said with the average cost of accidents under bodily injury about $15,500, there shouldn’t be an increase in lawsuits.