No-fault repeal rolls through second Senate committee

The Senate Judiciary Committee advanced a bill repealing the no-fault auto insurance system despite concerns over its potential effect on insurance rates and health care providers.

SB 54, sponsored by Republican Sen. Danny Burgess, would eliminate PIP coverage in favor of bodily injury liability coverage, which would pay out up to $25,000 for a crash-related injury or death or up to $50,000 for injury or death in a crash involving two or more people.

The current system requires drivers to carry $10,000 in personal injury protection, or PIP, to pay for medical coverage after an accident. The coverage pays out regardless of which party is responsible for an accident.

PIP is aimed at getting injured parties medical care quickly and without bogging down courts. However, critics say the system is rife with fraud and the $10,000 coverage limit, set in the 1970s, is insufficient. Critics of BI insurance note that it doesn’t pay out automatically, potentially leaving providers or the injured on the hook.

Toni Large of the Florida College of Emergency Physicians said the switch would put more stress on health care providers, who already “ work under both a state and federal unfunded mandate to treat and provide care to all (patients) regardless of their ability to pay, regardless of their insurance coverage or lack thereof.”

Large said about 25% of emergency room care statewide is uncompensated, and much of it is related to auto accidents.

“The mechanic is going to get paid to fix the damaged car and under this bill we need to make sure that (the) physician also gets timely compensation to put the patient back together,” she said.

Though the bill includes optional MedPay coverage to expedite medical care payments after an accident, it is not mandatory, and drivers who don’t carry MedPay could further burden the health care system, she said.

She also said in the opinion of emergency care physicians, the current system works and “there is no fraud.”

Those backing the switch say it would lead to lower insurance rates, though past studies have been unclear on how much drivers would save, if anything. Most studies pointing to a reduction assume high rates of PIP fraud. 

During the committee, the bill was amended to lower the liability insurance minimums for drivers with incomes below 200% of the federal poverty line or who are full-time high school or college students.

The amendment, put forward by Sen. Doug Broxson, also added language to restrict auto glass shops from offering incentives — such as cash or gift cards — to convince drivers to have their windshield repaired.

Bills making similar changes have been filed for the past few Legislative Sessions. Proponents say glass repair shops are abusing the state’s zero-deductible auto glass repair law to provide unneeded services.

In some cases, auto glass shop employees roam parking lots offering free windshield inspections and recommending repairs.

The bill amendment would allow insurers to offer policies “for an actuarially sound premium credit or discount” that require a deductible of up to $200 for auto glass repairs.

Democratic Senators worried the change could lead to more people driving around with cracks in their windshield.

“If I’m a citizen, and I just don’t have additional funding, because of the pandemic or unemployment, or whatever the reason is, and I’m not going to pay additional for that. So where would that leave me? And where would that leave society as a whole if we look at the public policy behind it,” Sen. Perry Thurston said.

Sen. Audrey Gibson added, “Obviously I’ve been approached in a parking lot and seen some other people approached as well with a little card or whatever. Isn’t it a consumer’s choice to determine whether their windshield is cracked enough? Doesn’t this amendment restrict that? Or at least make them pay to have choice?”

Committee Chair Jeff Brandes, a St. Petersburg Republican, said it would not restrict repairs but would give drivers a choice of whether they want a deductible on the front end, which “may allow the auto insurance policy overall to be less expensive.“

Florida Justice Association President Eric Romano took issue with setting a separate standard for students and low-income Floridians, saying “it basically would create two separate classes of drivers.”

“First class would be students and those in low income households. The second would be everyone else. The idea here being that the first class of drivers could purchase insurance coverage at lower limits presumably at a lower cost,” he said. “But the concerns we have are that the amendment does not require the insured customer to provide any proof that they meet those qualifications.

“It creates what is essentially an unenforceable honor system with no consequence,” he said.

The bill now heads to the Senate Rules Committee, its final stop before the chamber floor.