RIP PIP? No-fault repeal bills advance, but only House saves drivers

Florida drivers fed up with being forced to buy costly and fraud-plagued car insurance that duplicates their health insurance could save money under a bill that headed toward the House floor Thursday.

Rep. Erin Grall, R-Vero Beach

It represents a major step toward the biggest change in Florida’s car insurance system in half a century: ending the state’s Personal Injury Protection system designed to cover injuries in minor car accidents no matter who is at fault.

But driver savings disappear and premiums could even rise slightly over time under a Senate version that also cleared a committee on the same day. Like the House bill, it ends the state’s no-fault system but instead requires that drivers must buy  $5,000 in “medical payments” coverage.

That merely  “renames” and slightly reshapes PIP, said  HB 1063 sponsor Rep. Erin Grall, R-Vero Beach.

Nonetheless, Thursday brought signs legislators largely agree PIP is a troubled system that is hard to defend, though differences remain on how to replace it.

Grall’s bill, which passed the House commerce committee 22-5, heralds “definitely a shift in the way we view auto insurance,” she said.

SB 1766 by Sen. Tom Lee, R-Thonotosassa, passed the banking and insurance committee 8-1. It still has a couple more committee stops.

“I’m of the fundamental belief that PIP is woefully inadequate in the 21st Century,” Lee said. “It’s just lost pace with the cost and medical inflation and treating injured parties.”

But bill differences matter.

The Grall bill replaces PIP with required bodily-injury liability coverage of $25,000 per person or $50,000 per accident. Two out of three Florida drivers already carry that much BI coverage and more than 90 percent have some level of BI.

An actuarial study last fall found drivers could save up to $81 annually per car if the state repealed PIP, even with increases in other kinds of coverage. The study calculated average driver savings of 5.6 percent with 25/50 BI coverage, a House  staff analysis noted.

Drivers who already have that much BI coverage stand to save more than average.

Lee expressed concerns about making sure drivers without health insurance have some coverage for emergency treatment. He said that prompted the inclusion of the medical-payments requirement, which doctor and hospital groups have supported if PIP goes away. Some groups have put the health-uninsured rate at 13 percent, 15 percent or more.

As for premiums, “I believe this bill will be a break-even for Florida drivers,” Lee said.

In debate, he referred to the possibility the House and Senate will have to square off over competing versions if both chambers pass them. He told colleagues it’s possible the two chambers will “agree to disagree” and kick the issue to next year.

Is there any room for compromise to target the uninsured more directly? Lee’s office said he is “open to the will of the legislature.”

One option:  Require insurers to offer medical payments coverage but do not force consumers to buy it. Some states such as Colorado do that. Florida already does that for uninsured motorist coverage. Another option is requiring it only for drivers unable to demonstrate they have health insurance from Medicare, an employer plan or other qualified coverage. That imposes an administrative burden, but government already undertakes that when it asks for proof of insurance before people can get license tags, for example.

Florida remains among a handful  of states that stick with no-fault systems and do not require BI. Some 24 states have dropped no-fault systems in recent decades, but Florida has stayed with the system it started in 1971.

Florida drivers pay among the nation’s five highest car insurance premiums for some of the lowest required coverage amounts, a state Senate panel heard in January. Drivers often pay up to a quarter or more of their total car insurance bill for just $10,000 of PIP coverage.

Despite a string of “reform” attempts, PIP rates have increased an average of 25 percent since the start of 2015. Drivers have no choice but to pay the rising premiums even if they never get in an accident.

Some drivers have called it “double taxation” because in effect they pay twice for medical insurance.

The system is a “joke,” said driver Dick Natalizio of Palm Beach Gardens. “In Colorado, they got rid of no-fault and their premiums went down 35 percent.”

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