No-fault car insurance repeal on road to Florida House floor
The proposal seeks to replace a requirement that motorists carry personal-injury protection, or PIP, insurance coverage --- key to the no-fault system --- with mandatory bodily injury coverage.
TALLAHASSEE --- An effort to eliminate the state’s no-fault auto insurance system continues to roll in the House despite arguments that lawsuits and rates will go up.
The House Commerce Committee on Thursday voted 17-7 to support the proposal (HB 771), which is now ready to go to the House floor. The proposal seeks to replace a requirement that motorists carry personal-injury protection, or PIP, insurance coverage --- key to the no-fault system --- with mandatory bodily injury coverage.
Bill sponsor Erin Grall, R-Vero Beach, said the change, in part, would eliminate at least 25 percent of litigated cases in the state.
“That is massive, that is tort reform,” Grall said.
Grall also argued the PIP system continues to face fraud and that rates are already going up.
“They have increased year over year, sometimes as much as 50 percent, depending upon the carrier,” Grall said. “We can talk about the fact that rates will increase if we transition the systems. But rates are going to increase because of the severity, frequency and cost of living that we see in the state.”
Rep. Matt Willhite D- Wellington, called the $10,000 in coverage provided under PIP since the 1970s “laughable,” noting that his wife was in an accident two months ago with a motorist who had the state’s minimum coverage. PIP is designed to help cover medical bills.
“My first brush at the hospital and the emergency services bill exceeded $28,000,” Willhite said. “I haven’t gotten to the car repair yet.”
But a similar proposal (SB 378) has stalled in the Senate. And the House effort continues to draw concerns from lawmakers and people in the insurance and health-care industries.
Rep. David Santiago, R- Deltona, expressed concern about the potential impact on economically vulnerable residents if rates go up.
“In Florida, I think the study I read, one in eight are uninsured,” Santiago said. “And could this potential increase, if it does have an increase, cause more to go uninsured?”
Rep. Anthony Sabatini, R-Howey-in-the-Hills, was among several lawmakers who said more work is needed on issues related to “bad faith” lawsuits, an issue that has tripped up the Senate proposal.
“I think we need guardrails on the bill,” Sabatini said.
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.
Grall said she will continue to seek the “silver bullet” in the bad-faith issue.
Lawmakers in both chambers have floated the idea of ending the no-fault system almost annually since passing a law aimed at reforming PIP in 2012.
Toni Large, a lobbyist for the Florida College of Emergency Physicians, argued that the current system allows people to get treated immediately after accidents without the fear of litigation and makes sure payments go to health-care providers.
“Many people have health insurance on paper but cannot afford the high- deductible plans they have purchased,” Large said in opposing the proposed change.
A 2016 report by the Florida Office of Insurance Regulation projected that drivers would see a 5.6 percent savings by shifting to a bodily injury coverage requirement.
But Derek Silver, deputy director of government affairs for the Office of Insurance Regulation, advised committee members on Thursday that “if you were to repeal PIP, rates eventually would go up.”
A 2018 study by the actuarial consulting firm Milliman showed an average increase in premiums of $67, or a 5.3 percent increase.
Doug Bell, a lobbyist for Progressive Insurance, said its estimates indicated motorists could see premiums increase on average $312 to $345 a year under the change from PIP to bodily injury coverage.
“Folks that are just barely going paycheck to paycheck, they are going to see the largest increases,” Bell said. “They are the ones who can least afford it. So, I think you’ll see a real high rate of uninsured.”
Grall’s proposal also would require auto insurers to offer medical-payments coverage, known as “MedPay,” to consumers, a position the Senate has backed in the past. Such coverage could help pay medical bills if motorists are involved in accidents.
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.