The House has voted to repeal Florida’s no-fault auto insurance system.
By a 99-11 vote, a bill (SB 54) changing Florida’s auto insurance requirements is close to becoming law. The proposal next heads back to the Senate for it to approve a technical fix.
The bill, carried through the Senate by Zephyrhills Republican Sen. Danny Burgess, would end the requirement that Floridians purchase $10,000 in personal injury protection (PIP) coverage and would instead require mandatory bodily injury (MBI) coverage that would pay out up to $25,000 for a crash-related injury or death.
The measure already passed the Senate 38-1 earlier this month. However, amendments added House sponsor Rep. Erin Grall mean the measure would have to go back to the Senate after the House vote.
Those backing PIP repeal say the system is rife with fraud and that the $10,000 coverage limit, set in the 1970s, is woefully inadequate five decades later.
PIP coverage pays out regardless of which party is responsible for an accident and it does so quickly. MBI coverage, however, doesn’t pay out until a fault determination is made, which can leave health care providers or patients on the hook for thousands of dollars in medical bills while they wait for a claim to resolve.
One of Grall’s amendments approved last week changed the Senate’s proposed requirement for mandatory medical payment coverage. The Senate would require motorists to carry $5,000 in med-pay coverage, while Grall wants to allow motorists to have an “opt out” choice on $5,000 to $10,000 in med-pay coverage.
The second amendment clarified parts of the “bad faith” portion of the bill. A third amendment, approved Monday, fixed a technical glitch in the bill language.
No-fault repeal is a perennial effort in the Legislature, and passing the bill was not effortless. In the Senate, Burgess joked about the several times the bill had been postponed on the floor this month before lawmakers finally considered it.
“Not everybody loves this bill — I don’t love every aspect of this bill — but, again, let’s not let perfect be the enemy of good and not work on something,” Democratic Rep. Matt Willhite said.
Nine Republicans voted against the bill in the House, as did two Democrats. Republican Sen. Jeff Brandes cast the lone no vote in the Senate.
Burgess acknowledged it has become a “Frankenstein bill” with inputs from several stakeholders to create what he called a balanced bill.
Florida has some of the highest auto insurance rates in the country, and they are rising faster than every other state except Colorado, which pins the blame on repealing its own no-fault law.
Insurers and others warn that the PIP repeal and the ensuing rate increase would only drive more Floridians to ditch their insurance, which would further raise rates for insured Floridians.
“A bodily injury requirement with no personal injury protection like SB 54 proposes would hike up the cost of insurance and only lead to more drivers hitting Florida’s roads uninsured,” said Michael Feiner, a Florida-based personal injury lawyer and founding partner of Steinger, Greene & Feiner. “If there was no personal injury protection, a claimant would not need to meet a threshold of a ‘permanent injury’ to recover non-economic damages (pain and suffering) as is required now.”
Opponents say insured Floridians would pick up the slack, if not through their auto insurance, then through their health insurance premiums or higher taxes. Brandes warned the bill could raise rates on some of the poorest Floridians by more than half.
However, Grall told members insurance rates would go down based on the information available to lawmakers.
She pointed to a 2016 report by the Florida Office of Insurance Regulation that projected drivers on average would see a 5.6% savings with a shift to a bodily-injury coverage requirement.
“Members, I know that this is difficult to do. It’s difficult to think about a new system, a system that’s been in place for 50 years,” Grall said. “I believe it’s incumbent upon us to make sure that people have adequate coverage for the fatalities and the severity and frequency of the accidents that we see on our roadways every day.”
But a 2018 study by the actuarial consulting firm Milliman showed a potential average increase in premiums of $67, or a 5.3% increase. Earlier this month, Doug Bell, a lobbyist for Progressive Insurance Co., estimated the changes could cause “significant” rate increases for people who have only PIP coverage or who have bodily-injury coverage amounts lower than proposed new minimums.
The American Property Casualty Insurance Association sent out a news release Friday that said nearly 12,000 letters have been sent to lawmakers this month opposing auto-insurance changes.
“Floridians already pay the highest premiums in the country for full auto insurance coverage, so they are understandably concerned about any public policy changes that would push costs even higher,” said Logan McFaddin, the association’s assistant vice president of state government relations.
The association contends the bill could increase the cost of an average auto insurance policy by 23%, or $344. The association also argues costs would increase 3% to 6% because of a “lack of meaningful bad faith reforms” in the legislation.
Bad faith has been a sticking point in the past as the House and Senate have considered measures to repeal the no-fault system. Bad-faith lawsuits, which can be costly, involve allegations that insurers have not properly looked out for the interests of their customers.
The repeal effort has the support of Senate President Wilton Simpson, who noted in a statement that every state except Florida and New Hampshire have mandatory bodily injury coverage.
“For everyone’s protection, drivers must be insured at sufficient levels,” Simpson said. “PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”
Whether it has the support to make it into law is another question, as other elected officials aren’t sold, including CFO Jimmy Patronis who said early on in the Legislative Session that all indications are it would raise rates for “those that can least afford it.”
Content from The News Service of Florida was used in this report with permission.