PIP repeal killed in Senate as sponsor says foes ‘lying’ about rates

A Florida Senate panel voted down repeal of the state’s no-fault car insurance system Wednesday as opponents warned of massive rate hikes and the bill’s sponsor, a former chamber president, bluntly accused them of “lying through their teeth.”

Sen. Tom Lee

“These people don’t care about the rate increases that they’re lying through their teeth are going to happen,” said Sen. Tom Lee, R-Brandon. “I think a lot of the information you’re hearing today is not really honest.”

Instead this became a proxy fight about lawsuit reforms that have stalled for years in the legislature, not about repealing Florida’s no-fault system, Lee told the Senate appropriations subcommittee on health and human services.

The Florida House passed 88-15 a  bill that repeals the state’s requirement drivers buy $10,000 of Personal Injury Protection to cover the driver’s own injuries in an accident. HB 19 requires drivers to buy bodily-injury liability coverage, as all but two other states do.

A state-commissioned actuarial study found House-style repeal would save drivers $81 per car or 6.7 percent on average overall bills.

Florida drivers pay among the nation’s top six average premiums and PIP rates rose up to 54 percent among the state’s top 25 insurers in 2017, and on average 35 percent faster than overall premiums, The Palm Beach Post reported.

Though PIP was designed to avoid litigation, PIP lawsuits rose to a record of more than 60,000 in 2017, jumping close to 50 percent in one year, the Post reported. Lee mentioned that statistic Wednesday.

But the 6-1 vote in the Senate panel all but extinguishes repeal hopes for another year.

The Senate version, SB 150, required drivers to buy $5,000 of medical payments coverage, which doctors and hospitals wanted but opponents called recreating PIP under another name and wiping out driver savings. Still, keeping alive the Senate bill offered a chance to negotiate with the House.

Brad Nail, a senior manager for insurance and public policy for ride-sharing company Uber, said states that persist with no-fault systems are consistently “plagued with higher costs.”

“Voting for the bill keeps alive the hope for consumers of a better auto insurance system,” Nail told senators.

Insurance and medical lobbyists found an ally in Florida Insurance Commissioner David Altmaier.

“We are respectfully and regretfully opposed,” Altmaier said.

Asked by a legislator who said she heard rates would go up 71 percent in Broward County after repeal, Altmaier let that assertion stand. He spoke exclusively about a subset of drivers that represent about 7.6 percent of drivers in the county, according to the Pinnacle Actuarial Resources Inc. report. They buy only the state-requirement minimum including $10,000 of Personal Injury Protection to cover a driver’s own injuries in an accident, meaning they have no coverage to take responsibility for injuries they cause to others.

“It’s a reasonable assessment,” Altmaier said.

He chose not to mention savings the Pinnacle study projected for the vast majority of drivers under the House bill or any savings from eliminating recurring PIP fraud in a system designed to make payments almost automatic. Most Florida drivers have health insurance such as Medicare or employer plans that means they do not need PIP in the first place, yet they are forced to pay for its rate increases each year.

“PIP is worthless,” driver Leo Solar of West Palm Beach, who has Medicare, said. “It’s just like throwing your money away.”

The six-month PIP premium Solar paid last November was $249.30, the Post reported, It has climbed more than 40 percent from the $175.46 he paid in November of 2015.

But to hear insurance lobbyists talk, the real problem was what would happen if PIP were repealed.

Michael Carlson, president of the Personal Insurance Federation of Florida, representing insurance companies covering about 4 million Florida drivers, asserted even the Pinnacle study projected higher rates.

“Everyone concludes there will be some rate increase for Floridians,” Carlson said.

So the news for Florida drivers was forget about relief from paying some of the nation’s highest rates, as a roomful of industry lobbyists converged to smother repeal hopes.

Lee said he felt like a man who had to managed to “kick the top off an anthill.”

 

Uber says repeal PIP the House way

A ride sharing company like Uber has to think a lot about car insurance and how it works in different states for the company and its drivers. It’s a fundamental business and safety issue.

Uber’s Stephanie Smith

That’s why it’s worth noting a top Florida official with the company on Monday backed repeal of the state’s no-fault insurance system under a bill the state House passed 88-15. The bill is projected to lower consumer rates while ending Florida’s lonely vigil, virtually alone among the states, in failing to require drivers to buy bodily-injury liability insurance to take basic responsibility for harm to others.

“If enacted, this bill (HB 19) would make our public roadways safer and would lower premiums for the average Floridian statewide by more than 8 percent for mandatory coverage,” wrote Stephanie Smith, Uber Florida’s senior public policy manager, in floridapolitics.com.

A bill that a Senate committee may hear Wednesday, SB 150, is forecast to raise rates by recreating a form of the current Personal Injury Protection system that forces drivers to buy medical insurance on their car insurance policy.  Currently, motorists must buy $10,000 of PIP to cover a driver’s own injuries regardless of who is at fault in an accident. The Senate bill would require BI but also $5,000 of “medical payments” coverage.

Smith wrote, “PIP is a vestige of the 1970s insurance reform movement that has failed to accomplish what the academics who dreamed it up believed it would do. The goal of PIP was to eliminate lawsuits over minor injuries and lower overall auto insurance rates.”

Here is what really happened:  PIP lawsuits exploded to a record of more than 60,000 in 2017, The Palm Beach Post reported Monday.

Florida’s top 25 insurers raised PIP rates up to 54 percent in 2017 and on average 35 percent faster than overall rates, according to state records the Post requested.

“The reality is PIP continues to be a cottage industry devoted to extracting money from insurers, even when there is no merit to the claims,” Smith said.

She continued, “After an initial wave of PIP laws in the 1970s, no state has enacted a no-fault system like PIP again, and several states have wisely abandoned PIP due to the cost and the fraud inherent in the system.”

 

PIP car insurance, built to curb lawsuits, spurs record pile instead

A no-fault car insurance system that was supposed to reduce lawsuits in Florida has instead produced an all-time high mountain of more than 60,000 of them in 2017, a new report shows.

Source: Florida Justice Reform Institute report.

That represents a stunning rise of close to 50 percent in one year, according to data from The Florida Justice Reform Institute, a group that says it fights against wasteful litigation.

So are insurers rushing to tell legislators to repeal Florida’s Personal Injury Protection system before the session ends in early March? Guess again.

An insurance industry group never mentions PIP in its statement on the lawsuit report and has urged lawmakers to put off repeal another year.

Who benefits from keeping the current system? Florida’s top 25 car insurers have raised PIP rates up to 54 percent since the start of 2017, and on average hiked them 35 percent faster than overall premiums, The Palm Beach Post reported.

Florida drivers pay among the nation’s top six car insurance bills in one of the few states that retain a no-fault system. The state forces drivers to buy $10,000 of PIP to cover the driver’s own injuries in an accident regardless of who is at fault, no matter how much health insurance the consumer already has.

One of the justifications for PIP when it was created the 1970s was to reduce lawsuits after minor car accidents.

Almost half a century later, PIP’s relatively small benefit has hardly changed and in no way kept up with medical inflation, yet it is driving consumer rate increases and, in a final irony, leading the lawsuit parade.

Who’s suing? The lawsuits measured in the report are typically not filed by ordinary drivers but chiropractors, clinics, imaging centers and other medical providers suing insurers to get paid for PIP claims, researchers say.

PIP represents by far the largest source for a type of lawsuit that FJRI officials say is responsible for more than half of the state’s overall insurance litigation and is driving up consumer costs. It’s associated with an arrangement known as “assignment of benefits” or AOB.

It happens when third parties like a repair contractor or medical clinic tell consumers we’ll handle the claim for you if you sign this form assigning us the insurance benefit. It’s not uncommon in health care and other fields. Insurers say the trouble is, Florida’s laws provide too many incentives for some of the third parties take the insurers to court.

Yet you’d never know that PIP was involved in any way from an insurance industry group’s statement on the AOB lawsuit report. The focus is exclusively on property insurance claims representing about one-sixth as many suits compared to PIP, and auto windshield claims representing about a third as many. Insurers say these categories are growing, and PIP repeal must wait for reforms affecting lawyer fees that have stalled in the legislature for half a dozen years and seem likely to deadlock again.

“We are seeing an increase in the number of property and auto glass claims because one-way attorney fees are incentivizing AOB abuse,’’ said Logan McFaddin, the Florida-based regional manager for the Property Casualty Insurers Association of America. “Legislative reform is desperately needed to curtail the number of fake or inflated claims and lawsuits. Now is the time for legislators to protect Floridians from these bad actors and help reduce insurance costs.”

OK, but how about repealing PIP and lopping off the source of the majority of AOB suits in one stroke? Then pursue additional lawsuit reforms? At least two important insurance lobby groups in Tallahassee say no thanks.

The net effect: drivers keep paying rising premiums to insurers. A state-commissioned actuarial report said drivers could save up to $81 per car if Florida repealed PIP and required bodily-injury liability coverage. A bill that passed the House 88-15 would do that. Florida is one of only two states that do not require BI insurance to make drivers responsible for injuries to others.

A Senate PIP repeal bill remains stuck in committee as the session nears its end. Asked by a Post correspondent about the issue, Senate President Joe Negron, R-Stuart, offered a recap of committee stops with no comment on whether leadership believes it merits further attention or a vote on the floor.

“That bill has moved through one committee in the process with a favorable vote and is now in health and human services appropriations (committee), so it would be up to that committee to decide whether they want to take up the bill in the final time we’re here for session,” Negron said last week. “The short answer would be it’s undetermined.”

Instead of championing a chance for driver savings, insurers put out their own report that said rates would go up 5.3 percent under the House bill. The report prepared by Milliman Inc. for PCI acknowledged it used unverified, unaudited data from a subset of member companies that could be “biased” and chose to ignore any savings from eliminating PIP fraud. A group representing trial attorneys blasted it as not credible and inconsistent with the state report and with consumer savings in other states that dropped no-fault systems, including Colorado and Georgia.

So what’s the story? Insurers raise rates up to 54 percent in a year for PIP. Then lobbyists claim late in the session that rates would also go up under the House repeal plan. They encourage legislators not to believe a state-commissioned actuarial report that said drivers could save an average of near 6 percent on their overall bills after PIP repeal.

Now a report shows PIP is responsible for most of the lawsuits insurers are complaining about. It’s the elephant in the room, the biggest part of the mountain.

But apparently it’s not fit for mention.

See an expanded story version of this post here.

 

 

 

 

 

PIP repeal: House panel votes to overturn no-fault plan in Florida

A drive to repeal the state’s no-fault car insurance system after nearly half a century cleared an early hurdle in a renewed run Tuesday.  Its next stop: The House floor when the 2018 session starts in January.

Rep. Grall advocates for PIP repeal in the House commerce committee Tuesday.

HB 19 sponsored by Rep. Erin Grall,  R-Vero Beach, repeals the state’s Personal Injury Protection law in place since 1971 and replaces it with required bodily-injury liability coverage, which nearly all states require and most Florida drivers already have.

The 18-7 vote offers hope to drivers who are fed up with the current system. They stand to save up to $81 per car or nearly $1 billion annually according to actuarial studies — by no longer having to pay for a form of car insurance long plagued by fraud and high costs.

“Why should they have to buy more health insurance but only for their car?” Dale Swope, president of the Florida Justice Association, said before the committee. “It makes no sense to our older drivers and veterans.”

For that matter, the same question applies to the vast majority of Florida drivers who have health insurance from employer plans or other sources.

Groups representing doctors, emergency providers and others in the medical industry voiced opposition. Whatever its problems, PIP provides  coverage providers can count on for medical expenses after accidents, said Fraser Cobbe, representing the Florida Orthopedic Society.

“We are very concerned about components of the bill,” Cobbe said, indicating he will continue to talk with sponsors about including mandatory coverage for medical payments.

But supporters of medical-payments coverage typically want everyone to be forced to buy it, not just those lacking health coverage.

Representatives of insurers including Allstate and Progressive chose not to speak but indicated opposition to the bill. Some industry groups said they want lawmakers to reform Florida’s “bad faith” laws they say drive up costs in lawsuits.

The Personal Injury Protection system is designed to provide $10,000 to cover injuries in minor  accidents regardless of who is at fault. Reform attempts in 2012 reduced  “non-emergency” benefits to $2,500 and barred acupuncture and massage, but that was followed by a spike in the percentage of claims that purported to be for emergency care.

A string of reforms have failed to prevent rising premiums for coverage that duplicates health insurance most drivers already have from Medicare or other health plans, bill supporters said.

The bill is nearly identical to legislation that passed the state House last year, 81-29.

A Senate version requiring $5,000 “medical payments” coverage, to help make sure emergency medical providers receive at least some reimbursement, did not reach a vote in the full chamber last spring. Supporters of the House bill say required “medical payments” coverage just renames PIP and wipes out most driver savings on car insurance.

Florida drivers pay among the five highest car insurance premiums in the nation, for some of the lowest required coverage amounts, a state Senate panel heard last session. Florida lets unsafe drivers avoid responsibility while safe drivers are forced to pay the bill, repeal supporters say.

Florida is one of two states that do not require bodily-injury liability coverage, Grall has pointed out.

Two dozen states have dropped no-fault systems in recent decades, leaving Florida among a dwindling number that retain them. Colorado drivers saved 35 percent on their overall car insurance premiums after dropping a no-fault system there.

Drivers like Dick Natalizio of Palm Beach have called Florida’s system a “joke” as PIP premiums have shot up an average of 25 percent since the start of 2015. Even drivers who never get in an accident are forced by state government to buy it.

“I have Medicare,” he said. “They force me to buy PIP. It’s so ridiculous.”

Big House majority votes 89-29 to repeal costly no-fault driver plan

A car insurance system many Florida drivers reject as a costly and fraud-prone duplication of their health insurance would end after almost 50 years under a bill that passed the Florida House 89-29 on Wednesday.

That puts the ball in the court of the Florida Senate with the session winding down, but the House vote sends a ringing message that drivers like Dick Natalizio of Palm Beach Gardens welcomed.

Driver Dick Natalizio of Palm Beach Gardens wants PIP repealed.

“Fantastic,” Natalizio said. He has called the PIP system created in 1971 a “joke” that forces drivers to pay twice for health insurance they already get from Medicare, employer plans or other coverage. PIP rates have shot up an average of 25 percent in Florida since the start of 2015, but drivers have no choice except to pay even if they are never in an accident.

An actuarial study commissioned by the state last year found drivers could save up to $81 per car by repealing a state requirement to buy $10,000 of Personal Injury Protection, which covers a driver or passenger’s own injuries regardless of who is at fault in an accident.

Researchers found average driver savings would be about 5.6 percent by repealing PIP and instead requiring bodily-injury liability coverage to cover others when the driver is at fault in amounts of $25,000 per person or $50,000 per accident, as the House bill does. More than 90 percent of Florida drivers already carry at least some BI coverage, and two out of three carry 25/50. So it repeals a costly mandate and imposes one most already meet, putting them into a position to save money.

Florida is one of two states that do not require bodily-injury liability coverage, HB 1063 sponsor Rep. Erin Grall, R-Vero Beach, reminded colleagues on the House floor Wednesday. That means drivers are not required to take any responsibility in their insurance for injuring others.

Two dozen states have concluded no-fault systems are costly failures in recent decades and dropped them, so that only a handful now remain. Colorado drivers saved 35 percent on their overall car insurance premiums after dropping a no-fault plan.

“It is time to repeal PIP,” Grall said.

Florida drivers are required to buy some of the lowest coverage amounts in the nation, yet they pay among the eight highest average premiums.

State Rep. Julio Gonzales, R-Venice and an orthopedic surgeon, said he fully admits the PIP system is “broken,” but he opposed the bill because PIP at least makes sure drivers without health insurance have some coverage at emergency rooms. By some estimates about 13 percent of Floridians do not have health insurance, though hospitals are required to treat them in an emergency.

“I do not think we can bring this plane in for a landing without addressing the slew of physicians standing by to take care of us,” Gonzales said.

A Senate bill, SB 1766, would repeal PIP and require BI but also mandate $5,000 in “medical payments” coverage to cover a driver’s own injuries. Grall said the problem is that largely just preserves PIP under another name. Studies show it would wipe out potential driver savings, and still force responsible drivers in effect to pay twice for health insurance. The bill is still in committee.

The office of Senate president Joe Negron, R-Stuart, office did not immediately respond to a request for comment on whether he supports PIP repeal getting a full airing in the Senate this session.

Poll: Should Florida kill its no-fault car insurance system?

(Getty Images)
(Getty Images)

It’s been one of our top stories in the past week: A new bill proposed in Florida would end the state’s controversial no-fault car insurance system.

Florida is one of a handful of states requiring drivers to purchase Personal Injury Protection (PIP) medical coverage for possible car crashes, and maintain that in addition to already-existing health insurance coverage.

State Sen. Jeff Brandes, R-St. Petersburg, filed the bill, and told The Palm Beach Post, “The system is broken and rife with fraud and abuse. There is no amount of tweaking that will fix PIP.”

Is it time for the practice to end? We want you to weigh in.

Vote in our poll below, then comment to share your thoughts on no-fault car insurance.

Read more about the proposed bill.