Originally published by Florida Politics | View Story
By Guest Editors Scott Matiyow and Michael Carlson
The Legislature needs to hit the brakes on PIP repeal.
The solution in the fight against the problem of insurance fraud in Florida cannot be creating an even bigger problem.
The Florida Legislature is speeding toward repeal of Florida’s motor vehicle no-fault law and its personal injury protection (PIP) insurance requirement. Bills filed in the Senate and House would replace PIP with mandatory bodily injury coverage; the Senate bill goes one step further and mandates a PIP-like medical payments coverage.
On this course, rates will rise for Florida motorists, particularly those who buy the minimum required insurance and those who buy bodily injury coverage at amounts below what the proposed law requires. These drivers can least afford an increase, and it is estimated that hundreds of thousands of additional Floridians will drive illegally without insurance because of this increase.
Today an estimated one in five vehicles in Florida do not carry insurance — nearly the highest rate in the country, and this will get worse if these bills (HB 719 and SB 54) become law.
PIP is a $10,000 medical coverage that pays for your injuries if you are involved in a car crash, regardless of whether you are at fault for the crash. Bodily injury insurance covers the victims of a car crash, not the at-fault driver. To recover bodily injury benefits, an injured person may have to file a lawsuit.
The proposed law will require motorists to buy $25,000 in bodily injury coverage. The Senate bill adds a required $5,000 in medical payments coverage — which is basically PIP by another name — and a $5,000 funeral benefit. For a street-legal driver, this means having to pay for $35,000 in coverage rather than $10,000.
Forcing Floridians to buy more insurance — and in the case of medical payments coverage, to buy insurance that they may not need — is the wrong thing to do. This approach ignores the private market, where today you can buy bodily injury and medical payments coverage in whatever amounts you want. It also forces Floridians who have health insurance to buy more health insurance in the form of medical payments coverage.
There has been no outcry from consumers about auto insurance rates or the adequacy of coverage. Not one consumer has spoken in favor of this legislation in any committee. There is no turbulence in the Florida auto insurance market, unlike the property insurance market, which is in crisis.
While there are problems with PIP — notably fraud and overbilling — these problems can be readily addressed through a legislative fix and will not be fixed by moving to a similar medical payments coverage.
Importantly, there is no data to support proponents’ arguments that this will reduce rates. In fact, the data that exist point to significant rate increases for millions of drivers who buy low limits. Even the Office of Insurance Regulation has stated that rates will increase if we move to the proposed mandatory bodily injury system.
Who benefits from PIP repeal? A single constituency has been calling for repeal of PIP and replacement with more expensive bodily injury coverage: auto accident attorneys. These lawyers want more lawsuits to churn out their attorney fees. And under the proposed system, we will see an increase in personal injury lawsuits and an increase in profits to auto accident lawyers.
The members of the Personal Insurance Federation of Florida believe that any repeal of PIP must consider ways to alleviate potential rate increases. Meaningful reforms to Florida’s deeply unfair bad faith system should be included to help reduce lawsuits. While the Senate bill includes an attempt at bad faith reform, it has been weakened by the trial bar to the point that it may not help reduce lawsuits.
The Legislature needs to hit the brakes on PIP repeal. A bigger problem cannot be the solution. Please contact Gov. Ron DeSantis and tell him that Florida cannot afford the higher insurance rates generated by HB 719 and SB 54.