A driver in a Palm Beach Post story posted today calls the state’s no-fault system an expensive joke that state leaders should stop protecting.
At the newspaper’s invitation, the state’s insurance commissioner, David Altmaier, expanded on earlier remarks that cautioned against excessive expectations for driver savings.
Some context that helps explain the alphabet soup: An actuarial study last fall found state drivers could save an average of $81 per car, or close to $1 billion a year, if Florida killed its requirement that drivers buy $10,000 in Personal Injury Protection coverage — even after assuming premiums for other coverage such as bodily-injury liability went up.
More than 90 percent Florida drivers already buy some level of bodily-injury coverage, state officials said last year, so requiring BI instead of PIP — as one bill proposes — might see many responsible drivers come out ahead financially. Some medical groups want to require medical-payments coverage if PIP goes away, but legislators don’t have to do that and it represents no real gain for drivers who say PIP needlessly duplicates coverage they already have from Medicare or private health plans.
A spokeswoman for the insurance commissioner said in a statement:
“What the Office’s PIP study showed, and thus what the Commissioner’s comments have been based upon, is that eliminating PIP might save some premium (certainly for those who buy only PIP/PD) but if the legislature replaces PIP with a requirement to buy BI or MedPay, or if consumers choose to purchase those coverages anyway, people may not experience a significant premium savings. Some people, like the gentleman in the article, don’t think the state should decide what insurance he needs. That is a different reason for eliminating PIP to reduce premium. Premium savings from PIP repeal varies depending on where a person lives, and what insurance they buy before and after the PIP repeal.
“In addition, if PIP were repealed, most of the costs would transfer to other auto insurance coverages and cause increases for those coverages. Then there are those costs that would be covered by mechanisms outside of the auto insurance market, such as by health care practitioners, health insurance and by the injured claimant and there would likely be a delay for reimbursements since it would now fall under a tort system and fault would have to be determined.”
Not addressed here: Savings from drying up the funding for PIP-related fraud, inflated or unnecessary claims. Fake accidents and fraud rings get plenty of attention, but lawsuits accuse some hospitals of charging exorbitant fees for scans that use up the $10,000 benefit in a single day. Medicare and most private plans come with significantly stronger cost controls.