By John Haughey
The Center Square
February 29, 2020
The Florida Legislature has been itching to repeal the state’s 50-year-old auto insurance no-fault law since 2012, with the House adopting bills to do so as recently as 2018.
Once again, a proposal to replace the state’s personal-injury protection (PIP) system with mandatory bodily injury coverage will reach the House floor this year.
And, once again, a companion Senate measure has stalled.
The House Commerce Committee on Thursday approved House Bill 771, sponsored by Rep. Erin Grall, R-Vero Beach, in a 17-7 vote.
If adopted, beginning July 1, drivers at fault in auto accidents would be fully liable for damages they cause.
Its Senate companion, Senate Bill 378, filed by Sen. Tom Lee, R-Thonotosassa, advanced through the Senate’s Infrastructure and Security Committee on Jan. 21 in a 6-1 vote but has not moved out of the Banking and Insurance Committee.
Florida adopted no-fault in 1970. It requires vehicle owners and drivers obtain $10,000 in medical, disability and funeral expenses without regard to fault, subject to a limit of $2,500 for nonemergency medical care. In exchange for maintaining PIP, drivers are immune from tort claims.
HB 771 and SB 378 would require drivers secure bodily injury liability coverage of at least $25,000 for death or injury of one person, $50,000 for injury or death of two or more people and $10,000 for property damage.
Grall said eliminating no-fault would reduce Florida auto insurance lawsuits by 25 percent.
“That is massive,” she said “That is tort reform.”
Grall said because the PIP system is so addled with fraud and litigation, auto insurance rates in Florida – the third-highest in nation, according to an Insure.com 2019 analysis – will continue to increase.
“They have increased year-over-year, sometimes as much as 50 percent, depending upon the carrier,” she 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.”
Conflicting studies support and refute that contention.
A 2016 Florida Office of Insurance Regulation (OIR) report projected average rates would decline by 5.6 percent by adopting a bodily injury coverage requirement.
A 2018 study by Seattle-based global actuarial consulting firm Milliman projected premiums would increase on average by $67, or a 5.3 percent, if PIP was eliminated.
OIR Deputy Director Derek Silver appeared to favor Milliman’s more recent projections, telling the panel even if rates decline initially, “rates eventually would go up.”
Rep. Matt Willhite, D-Royal Palm Beach, called PIP’s $10,000 coverage “laughable,” recounting how his wife was in an accident recently with a motorist who had minimum PIP coverage, which only covers medical bills.
“The hospital and the emergency services bill exceeded $28,000,” Willhite said. “I haven’t gotten to the car repair yet.”
The measures are opposed by the insurance industry and health-care providers, particularly hospitals.
Florida College of Emergency Physicians lobbyist Toni Large said the PIP system allows accident victims to get treated immediately and ensures payments go to hospitals and health-care providers.
Rep. David Santiago, R-Deltona, citing a study that reported one of eight Florida drivers is uninsured, said eliminating no-fault would put even more uninsured motorists on the road, ultimately causing rates to increase even more.
Progressive Insurance lobbyist Doug Bells said his company estimates motorists could see premiums increase on average $312 to $345 if bodily injury is mandated.
“Folks that are just barely going paycheck-to-paycheck are going to see the largest increases,” he said.
Rep. Anthony Sabatini, R-Howey-In-The-Hills, said Grall’s bill won’t curb “bad faith” lawsuits, which involve allegations insurers failed in due diligence to policyholders.
“We need guardrails on the bill,” Sabatini said.