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The sudden acceleration of wide-ranging auto-insurance reform raises questions

Originally published by The Daytona Beach News-Journal | View Story

The Florida Legislature again is poised to overhaul the state's no-fault auto insurance law. It's an action that would affect everyone who owns a car and legislators are speeding through along this highway under decidedly low-visibility conditions.

Everyone hates Florida's auto insurance system. It's expensive, the third-highest rates among the states in one survey . A shocking number of Florida drivers are uninsured, some 20% according to one recent estimate. It's prone to fraud and attracts all kinds of litigation.

This despite multiple attempts at reform in recent years. The Legislature took up this issue in 2017, 2015, 2012, 2007 and 2003, just to name the more prominent tries. But this time, legislative leaders say they mean it.

Their proposed fix, however, could mean higher rates for just under half of car insurance purchasers. And that, in turn, would mean an increase in the already high number of uninsured motorists on the road. That doesn't sound like the reform motorists and the insurance industry was hoping for.

Florida has operated under a no-fault insurance system since the 1970s when Florida's auto insurance laws were considered something of a national model. Hard to believe, we know.

Under no-fault, drivers are required to carry $10,000 in PIP or "personal injury protection" coverage and $10,00 in property damage liability. The PIP part of this coverage pays out without regard for who's at fault for an accident. Your insurance pays for your medical costs. The insurance of the person who hit you pays for his medical costs. This means there's no need for courts to determine fault. That's why it's called "no-fault."

Under the 124-page auto insurance bill (SB 54) the PIP requirement would be done away with. Instead, car owners would need to buy insurance covering a minimum of $25,000 of bodily injuries to one person and $50,000 for more than one person's injuries. The $10,000 property damage liability coverage would be required, the same as before. Insurance companies would also be required to offer medical payments coverage, known as MedPay, with limits of $5,000 or $10,000 to cover the insured driver's medical expenses. (Yes, MedPay does sound kind of PIPlike, doesn't it?)

There's a lot for the insurance industry and consumers to digest here, and the history of past unsuccessful legislative fixes to the state's car insurance system does not inspire confidence. Backers of this bill seem to be taking a let's-pass-it-and-see-how-it-works approach.

The bottom line is that many car-owners will find themselves needing to buy higher and more comprehensive insurance than before. Cruising along with the minimum coverage allowed would be more expensive. Proponents see a highway full of better-insured drivers better able to pay for the results of a car crash. Detractors see uninsured drivers zooming down the passing lanes.

And although many would be happy to see the fraud-plagued PIP system go away, it's by no means clear that this will result in less litigation and fraud overall. In fact, a lot of things aren’t clear — and given the speed with which this legislation is moving, we have to wonder if that’s deliberate.

The measure passed the Senate on a 38-1 vote last week, an overwhelming vote that does not reflect the qualms some legislators have expressed about the legislation's likely effects. It's now before the House, which adopted some amendments Friday and will have its version up for final passage next week -- the last week of the regular session which means the clock is running out on bills the leadership does not consider urgent.

This isn't the reform many were hoping for, and there should have been a far more robust, open discussion about a drastic policy shift that affects every Floridian on the road. The only thing that seems certain is this: If this bill becomes law, Florida motorists can expect to get a letter from their auto insurance company come renewal time.

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