No-fault repeal backfired in Colorado. It could backfire here, too.

As a sign of trial lawyers’  growing influence in the Legislature, a bill to repeal no-fault auto insurance passed its final Senate committee in a party-line vote.

SB 54 would replace no-fault insurance, also known as Personal Injury Protection, with Mandatory Bodily Injury Insurance. The bill is being championed by the Florida Justice Association.

PIP insurance provides $10,000 for medical expenses and lost wages for people injured in a crash. It is purchased by the driver for their use, regardless of fault. The statute’s intent is to provide Floridians with quick payment of benefits for injuries after a crash.

Those who believe PIP is working cite the fact that most insurers in Florida refunded 15% to 20% refunds to policyholders last year. But some, led by the trial bar, claim PIP is broken and should be replaced with MBI coverage.

The last major revisions to auto insurance came in 2012 to help address rising rates. The impact of this legislation extended to providers, fee schedules, claims procedures, and fraud rates, and included mandatory rate-filing monitoring.

Nevertheless, a few years ago, FJA and other MBI advocates started pointing to Colorado to illustrate how they believed rates would decrease if Florida switched from a no-fault system to an MBI, or tort, system.

Colorado abandoned its no-fault system in 2003 in favor of MBI. At first, premiums went down — a point FJA has latched onto and trotted out in committee meetings. Yet Colorado’s auto insurance premiums are rising rapidly.

The state is currently third in the nation for rising car insurance premiums, and the volume of auto insurance litigation is growing, as are awards.

Needless to say, the switch has backfired, and FJA no longer cites Colorado as evidence an MBI system would be better for Florida drivers.

With no public outcry against the current PIP system due to the recent rate decrease and given the negative impact of MBI in Colorado, opponents of the bill say it could be a major miscalculation for Florida to move to MBI.

For one, Florida already has the highest rate of uninsured drivers in the country at 26.7%, and Colorado’s PIP-to-MBI switch caused a 16% increase in uninsured drivers.

If Florida changes to MBI and insurance rates increase, rates will increase only for people who have insurance.

MBI is based on the premise that people who cause a crash should take financial responsibility for the damages they caused. Those who opposed MBI believe it does not account for Florida’s unique position in the marketplace.

Over 100 million tourists visit the state annually, and most of them drive on our roads and highways. Many are either uninsured, do not carry insurance that matches Florida coverage or reject insurance products offered by the rental car companies. The rental car companies are immune from liability under current law.

Florida already leads the nation in uninsured drivers. Therefore, a new MBI statute eliminating PIP in all probability will result in a vastly increased number of injured motorists without coverage, just like in Colorado.

For the many of Floridians without health care insurance, this problem is compounded when an injured person cannot find a doctor to treat them.

If they do get treatment, they will rack up medical expenses waiting for their MBI case to work its way through the courts. By contrast, PIP pays physicians within 30 days getting a bill.

The potential far-reaching fallout of PIP repeal must be carefully examined. The repeal poses a substantial financial risk to Floridians and, considering the decrease in PIP premiums in 2020, it’s difficult to understand why the state would move to MBI in 2021.