Florida House panel votes to abolish PIP insurance effective Jan. 1

A House committee voted overwhelmingly Monday to do away with personal injury protection, or PIP, insurance in Florida.

The vote in the Insurance & Banking Subcommittee was 12-2, with Jay Fant and Blaise Ingoglia the holdouts.

PCS/HB 1063 passed despite concerns by insurers that they need stronger protections against bad-faith lawsuits by people injured by their policyholders.

Medical providers, meanwhile, argued that requiring accident victims to file lawsuits would make it harder for them to get paid.

Michael Grant, a Republican from Port Charlotte, summed up the mood among many committee members.

“This isn’t a perfect bill,” he said. “But I can’t continue to vote for or sustain a PIP environment that is just completely broken.”

Vero Beach Republican Erin Grall, shepherding the measure, said rates are 9 percent higher now than they were after the last time the Legislature reformed PIP, in 2012. The reason, she said, is that people keep gaming the system.

“As we try and reform it and try and fix it, it just gets tweaked in a different way,” Grall said.

“So the value of this insurance has gone down with each reform. And the goal of the bill is to put meaningful insurance in place and bring accountability to the system — and put responsibility where it lies, and that’s with the at-fault driver.”

Among those opposing the bill were trial attorneys from the Orlando area, who argued their working-poor clients can’t wait for a trial to pay their doctors and cover lost wages.

“Without that, they can’t pay their light bills. They can’t pay for their rent. They can’t buy food. They need the $10,000 in PIP benefits just to keep living,” attorney Coretta Anthony-Smith said.

William Swope of the Florida Justice Association caused a mild stir by declaring the trial lawyers’ organization opposed the bill. He later clarified that he’d misspoken.

Swope argued that it is wrong for the government to force people to buy insurance they don’t need. No-fault insurance was a 70s-era ”utopian idea that we’re going to treat everyone the same,” he added. “And it’s old, and it’s tired, and it’s beat-up.”

Insurers liked the main thrust of the bill but wanted at least to add some notice period before third parties — people injured by their policyholders — could take them to court. That would give insurers time to investigate claims and decide whether to settle.

Fant cited that omission in explaining his no vote.

“I have to believe that reasonable insurers, and reasonable trial attorneys, and reasonable legislators can find objective compromise language that addresses this, and takes uncertainty out of the marketplace,” Fant said.

“My concern is that it’s more of a Pandora’s box-effect. And we can see it coming, so we ought to put our arms around that early on, in the most fair way possible.”

Grall insisted it’s not necessary to go there right now. Case law already provides some protections.

Moreover, what the insurers want “would make it more difficult for the plaintiff to move through the system — and would actually, I think, encourage them to seek counsel as opposed to trying to resolve the matter on their own,” Grall said.

As for the medical providers’ concerns, Grall argued that PIP entails the purchase of unneeded insurance for the majority who buy more than the minimum $10,000 coverage under existing law.

“If you have health insurance, you are being asked to purchase unnecessary insurance to take care of your medical expenses. If you are retired and eligible for Medicare, you do not need coverage for lost wages or medical expenses,” Grall said.

Effective Jan. 1, motorists no longer would be required to maintain PIP coverage. Instead, they would insure against bodily injury or death caused by accidents.

Similar legislation, SB 1766 by Tom Lee, is pending in the Senate. Also pending is SB 156 by Jeff Brandes. Neither has yet secured a hearing in committee.

Under the House bill, individuals would have to prove they have bodily injury coverage worth $25,000 per person and $50,000 per incident, and $10,000 against property damage, when they register your car. The requirements for businesses would be higher.

There would be a transition period for policies already in effect.

The change is intended to save money — a study conducted for the Office of Insurance Regulation suggested in September that repeal could save $81 per car, although motorists could wind up paying more for other types of coverage, including health insurance.

Moreover the move could set a precedent for other insurance lines, and debating it could “stop the conversation this year,” she said.

“I think that conversation is best left separately. The decision to move from PIP to mandatory BI (bodily injury) would be huge for this state,” Grall said.