Peter Schorsch
During his two-plus years in office, Gov. Ron DeSantis has advocated for many priorities considered widely popular by most Floridians. From teacher pay raises to preserving water quality to protecting first responders, our Governor has a nose for sniffing out issues that endear him to voters.
But even the best hitters don’t smack home runs over the fence every time they come to bat — and occasionally, they even strike out.
Unfortunately for DeSantis, legislators just threw a nasty knuckleball at his desk with the PIP repeal bill (SB 54). Let’s hope he doesn’t swing at this one. He needs to veto SB 54.
DeSantis is right to look for ways to save Floridians money, and an excellent place to start is by lowering their auto insurance bills, but this bill is not the right solution.
If signed into law, SB 54 would fundamentally change car insurance in Florida by eliminating the no-fault personal injury protection (PIP) coverage system, replacing it with mandatory Bodily Injury coverage of $25,000 per person and $50,000 per accident, and $5,000 of medical payment, or Med-Pay, coverage.
Understanding insurance law isn’t for everyone and making insurance law is no joke. Those of you who focus on it every day are worthy of special recognition. But through all of the complexities and nuances of creating this bill, two aspects took it from a decent idea to a potential disaster: higher insurance premiums and Med-Pay.
Only about 20% of financially challenged “non-standard” auto consumers — comprised mainly of drivers with poor credit or a history of coverage lapses (and mostly minorities) — maintain Bodily Injury coverage in Florida right now. Why so few? Because the rest can’t afford to pay hundreds more each year in insurance premiums.
DeSantis says his goal is getting Floridians back to work, but with the state’s sprawling roadways, it’s pretty tough to commute to a job each day without a car. Price increases of up to 50% will lead to more working-class Floridians not buying auto insurance. They’ll risk it, buying food or paying rent instead of paying for auto insurance, which will inevitably drive up costs for everyone else.
Driving with insurance shouldn’t be a luxury in Florida.
The Med-Pay requirement — PIP’s inferior replacement — is another strike against SB 54. Lawmakers last reformed PIP in 2012, adding much-needed checks on fraudulent claims and bad-faith litigation that had driven up insurance rates. The switch from PIP to Med-Pay eliminates most of those checks and opens the door to more litigation.
Also, PIP typically covers a broader range of medical services than Med-Pay, like psychiatric and rehabilitative care. These essential services can be very costly for someone injured in a car accident — with Med-Pay, they’ll have to pay out-of-pocket.
Under this bill, premiums will increase and put a hefty burden on our most vulnerable Floridians. Many of the state’s most fiscally savvy policymakers, including CFO Jimmy Patronis, oppose the bill, believing it will raise rates.
Sen. Jeff Brandes, who voted against the bill, said it best, “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.”
DeSantis should be paying Moneyball if he wants to get the best deal for Floridians on auto insurance reform. That strategy requires a deep understanding of all numbers and knowing exactly what you’ll get from each deal. We don’t know exactly how much the PIP repeal bill will raise premiums, and without precise projections and analysis, that will undoubtedly be a big problem.
Florida has some of the highest auto insurance rates in the country. The Governor should pledge to not sign any reform into law unless he’s 100% sure it will lower premiums for working-class Floridians. That’s not the case with SB 54, so he should veto it.
18 comments
Simon
May 6, 2021 at 7:46 pm
This opinion piece is highly deceiving and a disgrace to be honest.
The only people that will see their insurance premiums go up are the ones that are already on the road without ANY liability coverage.
Those who do purchase adequate insurance will absolutely see their insurance premiums drop.
Why?
First off, you won’t have to carry PIP which will knock off $10-30 per month on your insurance bill. Second, those who have a newer car and have adequate coverage are paying crazy high premiums for uninsured/underinsured motorist coverage. That’s because people are allowed to be on the road without having any insurance in the event they hit your vehicle and cause damage to it or injure you. Even the insurance lobby says that almost 40% of people don’t have liability insurance or have coverage below $25,000.
In essence, those of us who have adequate insurance already will see our rates go down because we will no longer have to pay higher rates since we’re subsidizing other drivers who don’t have adequate coverage.
Those who don’t carry $25,000 in bodily injury liability won’t be allowed to drive.
Driving isn’t a Constitutional right. You can either carry adequate liability insurance or you can take a bus or Uber.
Gregory Blackburn
May 8, 2021 at 5:05 pm
You think that as the number of uninsured and underinsured drivers skyrockets, you aren’t going to see in big jump in your rates? Do you remember when Colorado was used as an example for dropping PIP? For under one year, then the proponents never mentioned it again, because the the responsible drivers rates jumped to cover those that were underinsured.
David
May 10, 2021 at 4:20 pm
Wrong. Explain how this is not a windfall for the big personal injury law firms when the sponsor is a partner at Rubenstein Law?
Huh?
Stu Pid
May 13, 2021 at 6:54 pm
WRONG!… This bill DOUBLES the minimum coverage you are FORCED to buy. You think the Insurer will take on twice the risk and reduce your premium? Hell no they won’t…. Now, “no-fault” is a main reason why we have such high rates. So is the insurance mandate. The answer isn’t more regulation. It’s to get government out of it and let Consumers and Insurers dictate rates/risks…
P.S., driving was a right until we allowed our tyrants to turn it into a privilege. The Founders knew one would “assemble” with horse drawn carriages way more dangerous than cars. They didn’t say you needed to insure it, have a license or tag.
Lauren
May 20, 2021 at 5:18 pm
Almost all States have NO PIP. Florida is one of the few. And the auto insurance premiums are sky high compared to the rest of the country. I lived in the Chicago and parked my car on the street (no garage) and my auto insurance skyrocketed when I moved to a rural northern Florida town and garaged my car in a sleepy community. How car insurance could cost more here than in Chicago is because of PIP.
Kevin
May 7, 2021 at 8:44 am
Look at who is supporting the veto effort – major insurance associations – and you will know all you need to know.
Rob
May 7, 2021 at 9:34 am
First of all, Med Pay is optional in SB54. You can elect to not buy it, which is why the medical providers don’t like this bill. And the cost is entirely relative. The “non-standard” crowd will take a hit on this. If you’re 20 years old, living in Tampa/Jax/Miami and you normally just buy minimum limits (PIP and Property Damage Liability) adding 25/50 of bodily injury will jack your rates significantly. This bill will disproportionally hurt young and poor drivers. The person with good credit who maintains their coverage and already carries bodily injury liability – they’ll see a price reduction initially. The Legislature is using Colorado as an example of why they should change. They dropped no fault like 10 years ago and average rates decreased significantly….until they didn’t. Now they’re rising faster than almost anywhere in the country. And the reason? Litigation. PIP litigation and outright fraud are a beyond a problem in the current FL system. The lawyers won’t just pack it up and go home because they changed the law. Higher limits will lead to higher rewards. Rewards are paid with insurance premiums. Guess what that means over time? The funny thing is, homeowners insurance was the bigger problem this year (due to litigation again), yet they chose to “fix” car insurance.
Brian
May 7, 2021 at 10:30 am
Pip needs to go. There is nothing positive about it at all. This is an old antiquated law that needs to die. Time to think ahead and do what most every other state does and that is require bodily injury coverage. If you can’t afford to protect other Floridians due to your negligence then stay off the roads. Many people are severely injured and can do nothing about it because many drivers especially in south Florida do not have liability coverage. Most people in this state do have liability so most people’s rates will decrease for sure. This bill is a win-win for everyone. And the reason why attorneys fees are so high in pip litigation is because the insurance companies try and NOT PAY PIP! That is why they want to keep PIP around so they can jerk everyone around. The attorneys deserve their fees. Anytime an insurance company wants something there is a reason. There is a reason why they don’t want mandatory bodily injury. Think about it. Sign this bill and let’s move into the future. The author of this article should be ashamed of himself. Complete garbage.
Simon
May 7, 2021 at 1:22 pm
I moved to Florida 4 months ago from Georgia.
My 6 month premium for full coverage with $500 deductibles, $5,000 in medical payments, 100/300 bodily injury & UM, and 100 PD was $550.
Same exact coverages, minus the $5,000 in medical payments (since there’s PIP) and my premium is $1,040.
Yes, I shopped around and spoke to agents from State Farm, Geico, Farmers, Progressive, and Allstate and every single one of them said the same exact thing.
Insurance rates are higher in Florida for 2 reasons:
1 – Mandatory PIP (this is about $130 for 6 months for me btw)
2 – There’s no bodily injury requirements so everyone that only carrier state minimum insurance coverage counts as “uninsured” when calculating uninsured motorist and collision premiums. My uninsured premium is $101 and my collision premium is $220.
Stop spreading lies. Stop being a parrot for insurance companies.
If you want to drive your 4,000 pound vehicle on our roads at 70 mph then you MUST carry liability insurance to cover damages to others if you screw up.
Governor DeSantis PLEASE SIGN SB54
Lauren
May 20, 2021 at 5:07 pm
Yep. I moved from Chicago to a rural Florida town and my car insurance increased significantly following the move. I lived in the City of Chicago, 2.2 miles from the Loop and parked my car on the street. My car insurance was less there than it is in rural Florida where I garage the car. PIP is to blame. Florida is one of the few remaining States that have PIP.
Fraud in automobile accidents will not stop, ever. Whether its PIP or 3rd party suits against the tortfeasor, there will always be scam artists/attorneys/doctors in cahoots to inflate medical bills and outright lie about injuries. The real focus needs to be rooting out and prosecuting the network of fraudsters. In the meantime, lets reduce the premiums for everyone else.
Also, as an aside, many States have provisions that bar personal injury plaintiffs from claiming non-economic damages (pain and suffering, loss of normal life, etc.) if that plaintiff did not have auto insurance at the time of the accident. Florida should adopt this.
Charles Cartwright
May 11, 2021 at 11:26 am
If this article is true, why is it the three of the four most expensive states for auto insurance all have PIP?
John Geletka
May 16, 2021 at 9:06 am
If the bill becomes law, drivers will be mandated to carry $25k in medical liability (Bodily Injury) coverage per person with $50,000 per incident. Additionally, they are required to carry $5k in death benefits as well as maintaining the $10k minimum for property damage liability coverage.
MedPay must also be included unless it is refused by the insured in writing. MedPay is like PIP, but under the bill, would be far less regulated. With regards to both medical liability and MedPay coverages, there would be no fee schedule governing payments, no mandate for examinations under oath, and no demand letter requirement which would allow suits to be filed without putting the carrier on notice.
These issues combined with the increase in mandatory limits will nearly double insurance rates for about 80 percent of the non-standard market – which are often those with low credit ratings or limited credit history. Under this law, Bodily Injury lawsuit volume will likely more than triple – which means there will be a significantly higher focus on fault determination, injury severity and bad faith claims handling.
There are postings in here about the Insurance Industries lobbyists. Medical providers, who will not get paid for services rendered and trial Attorneys. Rep. Erin Grall, who sponsored the house version, is an attorney who does personal injury work, and is a Trial Attorney.
This bill is a windfall for Trial Attorneys. It does nothing to protect the people. It’s simple math. More required coverage means insurance rates will skyrocket, unless you have more insurance in place than is required by statute. There will be a large increase in uninsured drivers who work in low wage jobs. They will be involved in car accidents and use the hospital system for unpaid care. This will be passed on to the consumer/tax payor to pay. They will drive anyway to feed their families.
Sen. Jeff Brandes, R-St. Petersburg, said the bill’s provisions had not been sufficiently looked at. He added he checked with an insurance expert who predicted the bill would raise rates by 40%. “There is no reason we could not take this language, let it simmer over the summer,” Brandes said. “Let’s figure what’s going to go on with rate increases based on this language, because based on this language right now, what people are telling me is that for the poorer Floridians, those who are struggling to make it, the rates are going to increase 40% in a state that’s already one of the most expensive in the country.”
Senator Brandes is correct. This needs much more analysis before it’s signed into law. Every position has a valid point but this bill, at this time, at this amount of increase and after massive job losses from a pandemic is financially reckless for Florida citizens at best.
Governor Ron DeSantis should veto this bill until the state fully recovers and if further analysis s=indicates its prudent in its current form.
Brian
May 18, 2021 at 11:27 am
John, you are incorrect. The only people that PIP benefits is medical providers like yourself. You do own Med-Florida Health Services, Inc. correct? If you are so concerned about the people of this State, then you would want all drivers to carry liability insurance. Clearly, you have an interest in PIP and that is the only reason why you posted your nonsense. This bill should become law. Time to move forward John, the people of this State deserve better than to fill your pockets.
Lauren
May 20, 2021 at 5:12 pm
He should not veto the bill. UIM/UM coverage in your own policy is a PIP alternative. If you are injured from an uninsured motorist, you can seek recovery from your own insurance carrier up to the limits of your own policy. Getting rid of PIP will reduce policy premiums. And if you are outside of major cities, your premiums will reduce further.
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