The House Civil Justice & Property Rights Subcommittee voted Wednesday unanimously to advance a proposal that would fundamentally alter Florida’s auto insurance system.
Sponsored by Republican Rep. Erin Grall of Vero Beach, the proposal (HB 719) would eliminate Florida’s personal injury protection (PIP) requirement and no-fault insurance system in favor of bodily injury liability coverage.
The current system, established 50 years ago, requires motorists to carry $10,000 in personal injury protection to pay for medical coverage after an accident. The coverage pays out regardless of which party is responsible for an accident.
Under Grall’s proposal, the mandatory bodily injury coverage would be set at $25,000 per person and $50,000 per accident.
The bodily injury insurers must also offer medical payment coverage at $5,000 or $10,000 and include a $5,000 death benefit.
The proposal’s proponents note the PIP system is riddled with fraud, causing rates to rise out of the reach of low-income motorists.
They also contend PIP coverage is not needed. Florida is one of two states that does not require bodily injury coverage for drivers, Grall noted.
“We are forcing many of our citizens to buy coverage that they do not need,” Grall said. “If you have health insurance today, you are being asked to purchase unnecessary insurance. If you are retired and eligible for Medicare, you do not need coverage for lost wages or medical expenses, yet you are forced to maintain this coverage in Florida.”
Critics argue the proposal would raise rates for motorists, particularly those with minimal policies.
After public testimony from various interest groups, Republican Rep. Vance Aloupis of Miami described the testimony as a tale of “two different narratives.”
Many speakers cited a 2016 study on PIP insurance from Pinnacle Actuarial Resources.
The study, among other focuses, analyzed “various scenarios involving premium impacts to Floridians if certain insurance requirements related to PIP were repealed,” a news release said.
Speaking to members at their request, Office of Insurance Regulation Commissioner David Altmaier explained that the report’s details garnered varying opinions.
He warned the change might raise costs for motorists.
“There are a large number of Floridians that either don’t have insurance because they can’t afford it or can barely afford the insurance that they have now,” Atlmaier explained. “And if you ask them to purchase more insurance, that’s going to exacerbate their situation.”
While this isn’t the Legislature’s first crack at Florida’s no-fault system, the proposal has lobbyists rushing out of the trenches.
Grall estimated roughly 150 lobbyists have weighed in on the issue.
“I find some of the tactics kind of shameful when you have a company come here and call out members to try to strong-arm us into a ‘no’ posture by suggesting we’re going to harm the members of our district,” said Democratic Rep. Mike Gottlieb of Davie.
Grall’s proposal goes next before the House Insurance & Banking Subcommittee and Judiciary Committee.