Originally published by Orlando Sentinel | View Story
By Jim Saunders, News Service of Florida
TALLAHASSEE — Florida senators are moving forward with a proposal to do away with the state’s longstanding no-fault auto insurance system, with trial attorneys and insurers closely watching the debate.
The Senate Judiciary Committee approved a bill (SB 54) that would eliminate no-fault, and its requirement that motorists carry personal-injury protection coverage, and instead mandate bodily injury coverage.
Sponsor Danny Burgess, R-Zephyrhills, said the bill would make Florida like 48 other states that have bodily injury insurance systems. He said he thinks it would help ensure that motorists have adequate coverage.
Before giving approval, the committee made changes to the proposal, including reducing required coverage levels for low-income people and students and raising the possibility that motorists could pay deductibles to have windshields repaired.
The windshield change to the bill came after insurers have complained in recent years about auto-glass businesses offering incentives, such as gift cards, to have motorists replace windshields. Currently, insured motorists do not have to pay to get windshields repaired.
Lawmakers during the past decade have repeatedly discussed moving away from the no-fault system, which requires motorists to carry $10,000 in PIP coverage to help cover medical bills. In part, they have pointed to fraud in the system.
Bodily injury coverage, which many motorists already carry, pays for injuries or deaths that drivers cause to other people in accidents. Under the Senate proposal, motorists generally would be required to carry 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.
But under a change approved Monday, those coverage requirements would be reduced to $15,000 and $30,000, respectively, for low-income motorists and students. Low-income motorists would be defined as having incomes that are 200% or less of the federal poverty levels.
Eric Romano, president of the Florida Justice Association, which represents trial attorneys, questioned the change, saying the bill wouldn’t require proof that motorists meet the qualifications for the lower coverage amounts. He said it is essentially an “unenforceable honor system.”
While eliminating the no-fault system would affect millions of motorists across Florida, a major part of the debate about the bill involves potential changes to what are known as “bad faith” lawsuits. Such lawsuits can be costly for insurers and involve allegations that claims were not handled properly.
Insurers and their supporters are backing bad-faith changes in the bill, while they face opposition from trial attorneys.
The bill also is drawing attention from emergency-room physicians, as the PIP requirement has ensured $10,000 in coverage for medical care.
Burgess’ bill, which earlier passed the Banking and Insurance Committee, is slated to go to the Rules Committee and then could go to the full Senate after the annual legislative session starts March 2. A similar House bill (HB 719), was filed Feb. 3 by Rep. Erin Grall, R-Vero Beach, but has not been heard in committees.