No-fault repeal rolls toward passage in the House

The House is expected to vote this week on a bill to repeal Florida’s no-fault auto insurance system, but a pending amendment to the bill could force it back to the Senate, creating a tight timeline for the measure to pass.

The Senate, in an overwhelming vote, approved its version of the no-fault repeal (SB 54). The bill, carried by Zephyrhills Republican Sen. Danny Burgess, would see the state eliminate the current requirement that drivers carry $10,000 in personal injury protection coverage and instead require they carry mandatory bodily injury coverage that would pay out up to $25,000 for a crash-related injury or death, or $50,000 for multiple injuries or deaths.

Opponents say an MBI system would send premiums through the roof for drivers who carry insurance policies below the $25,000/$50,000 limits in the repeal bill. Additionally, critics point to the slow reimbursements inherent in an MBI system, which could leave drivers and health care providers on the hook while a case works its way through the court.

Since no-fault insurance pays no matter who is responsible for an accident, health care providers generally get paid quickly for treating auto accident injuries. But MBI holds back payment until a fault determination is made.

To address the shortcoming, Senators tacked on a requirement that drivers also purchase $5,000 in medical payments insurance, or “med-pay,” to cover bills that need to be paid quickly.

Before the amendment, the bill would have required insurers to offer the coverage but would have given drivers the option of whether or not to purchase it.

The amendment raised concerns on the Senate floor, with St. Petersburg Republican Sen. Jeff Brandes saying it was irresponsible to make such a substantive change to the legislation without so much as a staff analysis outlining the potential impact it could have on insurance premiums.

“You can’t go home and look your constituents in the eye and say this is going to lower your rates for your poorest constituents. It may raise their rates 15, 20, 70%. We don’t know. And that isn’t right,” he said.

Though Brandes was the only Senator to vote against the overall bill, others were wary of the change.

On Friday, the House moved the no-fault repeal forward, positioning it for a final vote. However, the chamber accepted an amendment from Rep. Erin Grall, the House no-fault repeal sponsor, to strip out the med-pay coverage requirement and insert a provision to give drivers an “opt out” choice on $5,000 to $10,000 in med-pay coverage.

The bill otherwise remains the same, and according to insurers would vastly raise rates for low-income motorists.

The American Property and Casualty Insurance Association has warned for weeks that a no-fault repeal would greatly affect the 40% of motorists that carry insurance with minimums below the 25/50 threshold in the bill. Their estimate predicts those drivers could see their auto insurance costs rise by $165 to $876 a year.

Others predict even bigger spikes.

Don Moser, president of Amwins Specialty Auto of Florida, said the no-fault repeal will result in substantial cost increases for drivers in the “non-standard” market who do not currently purchase bodily injury coverage.

He explained, “This will be most pronounced in the segment of our population with limited income, including a disproportionate impact on minorities. The increased costs come from roughly 80% of the people in the ‘non-standard’ market who currently do not purchase bodily injury coverage due to cost and/or need. Making these people buy 25/50 bodily injury limits will add $600 to $1,000 per year to the costs for these people.”

Moser also took aim at med-pay, whether required or optional, saying it that the lack of a Medicare fee schedule to prevent excessive billing practices could lead to high levels of fraud — something lawmakers contend is already a major problem with PIP, though there is little evidence to bear that out.

If the House passes the amended bill, it would head back to the Senate. If the upper chamber concurs with the med-pay-less system switch, the bill would head to Gov. Ron DeSantis.

Gov. Ron DeSantis so far hasn’t indicated whether he will sign the bill, though Brandes said on the Senate floor that the Governor wasn’t opposed to the measure. CFO Jimmy Patronis, however, has said he opposes the change and believes it will raise rates.

“I grew up in a service industry, I had employees that work from month to month, and if you increase their insurance rates by $15 or $18 a month, that’s real money to somebody’s pocket,” he said.