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‘PIP’ Repeal Moves Forward In Senate

Collision between an orange sedan and a yellow hatchback
Creative Commons
The Florida Channel
Collision between an orange sedan and a yellow hatchback

A move to eliminate Florida’s no-fault auto insurance system advanced Monday in the Senate, though a similar House proposal has not been heard as the annual legislative session reaches its halfway point this week. 

The Senate Banking and Insurance Committee voted 5-3 to approve the Senate bill (SB 1052), which sponsor Tom Lee, R-Thonotosassa, expects to be worked into any broader insurance package that emerges in the second half of the session.

“I’m just trying to put my bill in a position where if something were to come together that this bill would be in a posture to be part of negotiated resolutions to any insurance reforms we do this session,” Lee said after the meeting.

A House proposal (HB 733) aimed at repealing the decades-old no-fault system has not been heard in committees. Under the non-fault system, drivers are required to carry personal-injury protection, or PIP, coverage to help pay medical bills after accidents.

For several years lawmakers in both chambers have floated the idea of ending the no-fault system. Motorists are required to carry $10,000 in PIP coverage, an amount unchanged since 1979.

“It’s just fundamentally irresponsible for people to be driving around in 2019 with what essentially amounts to $1,500 in no-fault insurance,” Lee said.

The House and Senate proposals would move away from the PIP requirement and, starting Jan. 1, mandate that motorists carry bodily-injury coverage. 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.

Under Lee’s proposal, insurers would be required to offer medical payments, or “MedPay” coverage, to motorists. But unlike past proposals, motorists would not be required to have the coverage.

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. A study two years later by the actuarial consulting firm Milliman showed an average increase in premiums by $67, or a 5.3 percent increase.

Lee said he favors the Office of Insurance Regulation estimate.

No-fault coverage was a target in 2012 of former Gov. Rick Scott and former Chief Financial Officer Jeff Atwater as critics said the system had become riddled with fraud. Lawmakers approved legislation to try to fix the problems but have repeatedly returned to the possibility of repealing no-fault.

The proposed elimination this year is one of several high-profile insurance issues in the Legislature. Perhaps the biggest fight centers on the controversial practice known as assignment of benefits, but insurers and business groups also are hoping lawmakers will take up issues such as restricting “bad faith” lawsuits.

Bad faith cases involve allegations that insurers have not properly looked out for the interests of their customers.

Sen. Jeff Brandes, R-St. Petersburg, said Monday he couldn’t support Lee’s no-fault bill without the inclusion of changes to bad-faith laws.

“This is one of those issues where PIP and this conversion needs to happen, and everybody kind of agrees that it needs to happen,” Brandes said. “I’d think you’d find almost full support here if we could find some pathway forward on third-party bad-faith.”

The addition of bad-faith legislation to past PIP-repeal efforts has been fought by the House, where bill sponsor Erin Grall, R-Vero Beach, has said the change would make the proposal “more complicated than it needs to be.”