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.

 

 

 

 

 

Florida drivers still pay twice for health insurance in Senate plan

Florida drivers  could save up to $81 per car by ending the state’s no-fault car insurance system, research shows, but a state Senate bill discussed Tuesday neutralizes most of the savings as a 2018 showdown shapes up.

SB 150 would “protect hospitals frankly,” Sen. Tom Lee, R-Thonotosassa, told his chamber’s banking and insurance committee.

State Sen. Tom Lee talks about his PIP repeal bill Tuesday.

That’s by requiring drivers to buy $5,000 in medical payments coverage to cover injuries in accidents, no matter how much health insurance drivers already have from Medicare, employer plans or other policies. Lobbyists for hospitals and doctors have argued that is necessary to make sure drivers have at least some coverage in an accident, though legislative proposals they favor would make everyone buy it, not just those who cannot demonstrate they already have health insurance.

A House bill that repeals the no-fault system without requiring medical payments coverage is headed for the chamber floor when the session opens in January.

The Senate panel adjourned Tuesday in mid-discussion, but officials said a vote was likely at its next meeting in a few weeks.

Since the 1970s, Florida has made drivers to buy $10,000 worth of Personal Injury Protection coverage for injuries in minor accidents regardless of who is at fault. Sponsors of both Senate and House plans agree it’s a fraud-plagued and flawed system and Florida should join nearly every other state in requiring bodily-injury liability insurance, which most of  the state’s drivers already carry anyway. But the bills differ importantly on how to get there.

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 for what they do while safe drivers are forced to pay the bill through rising PIP rates, repeal supporters say.

Paying twice for health insurance is “like double taxation,” as one Delray Beach driver has put it.

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.”

PIP: Driver savings up to $1B at stake as Senate bill renews fight

A Senate bill filed this week sets renewed battle lines for the biggest potential change in Florida car insurance in half a century.

At stake: whether Florida drivers can save up to $1 billion a year by not being forced to buy medical coverage many find maddeningly expensive and duplicative of their health insurance, while watching at-fault drivers escape responsibility.

SB 150 by state Sen. Tom Lee, R-Thonotosassa, repeals the state’s Personal Injury Protection requirement, makes drivers buy bodily-injury liability coverage, but retains a mandatory $5,000 in medical payments coverage. That last part is a key point of contention.

Last spring the House voted 89-29 to repeal a car insurance system many Florida drivers resent, but without requiring medical coverage. Sponsor Rep. Erin Grall, R-Vero Beach, said  the problem with mandating medical payments coverage is it essentially renames PIP and wipes out most driver savings.

Florida drivers are required to buy some of the lowest coverage amounts in the nation, including $10,000  in PIP to cover a driver or passengers’s injuries regardless of who is at fault  in an accident. Yet they pay among the eight highest average premiums, and PIP premiums shot up 25 percent in 2015 and 2016.

An actuarial study commissioned by the state found drivers could save up to $81 per car or close to $1 billion by repealing the state PIP requirement, even with projected increases in bodily injury liability premiums.

A Senate version similar to Lee’s refiled bill never got to a vote in the full chamber there.

Why not?  Asked by The Palm  Beach Post if he personally opposed a PIP repeal bill or thought it was too soon, Florida Senate President Joe Negron, R-Stuart, said in July, “No, the bill didn’t pass through all the committees of reference.”

Florida is one of two states that do not require bodily-injury liability coverage, Grall noted last spring. That means drivers are not required to take responsibility for injuring others when they buy insurance.

Two dozen states have concluded no-fault systems are costly if well-intended failures in recent decades and dropped them. Colorado drivers saved 35 percent on their overall car insurance premiums after dropping a no-fault plan.

Senate and House sponsors agree the system needs to go. The difference is how.

“While well intentioned anecdotally, Florida’s Motor Vehicle No-Fault Law has resulted in widespread fraud, abuse, and a complex litigation process,” Lee said. Since its enactment in the 1970s, he said, “the value of the PIP benefit has eroded, while Florida’s auto insurance premiums continue to rise.”

Under the Senate bill,  Floridians would be required to purchase bodily injury liability coverage at limits of $20,000 per person and $40,000 per accident, $10,000 for property damage, and $5,000 in medical payments coverage.

“More than 92 percent of Florida drivers currently have some form of bodily injury coverage,” Lee said. “For many, PIP is a duplicative coverage that burdens drivers with paying for accidents they didn’t cause. Good drivers are being punished by having to cover rate hikes, even if they never get in an accident, to pay for the negligence of other drivers and the general PIP costs in their region.”

SB 150 phases in bodily injury liability coverage requirements over time until it reaches $30,000 for one person and $60,000 per incident.

“The legislature tried year after year to fix Florida’s overpriced, no-fault system,” Lee said. “By switching to a tort-based system, we increase the simplicity of litigation, provide more adequate liability coverage at a reasonable price, and preserve some important protections for healthcare providers.”

Still, the Senate bill forces drivers to pay for medical payments coverage no matter how much health insurance they have from Medicare, employer plans or other health coverage. But it’s not harmless “extra” coverage, as many exasperated drivers see it. It’s a source of runaway costs they have to pay even if they never get in an accident.

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

What are some potential solutions if the Senate and House differ on requiring medical payments coverage? One is requiring insurers to offer the coverage but not forcing drivers to buy it. Another is allowing drivers to opt out of medical payments coverage if they can demonstrate they have qualifying health coverage.

 

 

 

PIP, worker’s comp, AOB bills stall as session ends

A chance to save Florida drivers  up to $81 per car on their insurance bills collapsed along with attempts to curb attorney’s fees in worker’s compensation and property-insurance claims as state legislators failed to reach agreement Friday evening.

Driver Dick Natalizio of Palm Beach Gardens wants PIP repealed.

Legislators are scheduled to end the session Monday by passing the budget but have said they will not take up other issues then.

The House passed a bill 89-29 to repeal the state’s no-fault car insurance system after nearly 50 years, requiring bodily injury liability coverage instead, which most states do. That could have could brought down rates about 6 percent, an actuarial study last year found. But a Senate bill did not make it to the floor.

Attempts to hold down rates for worker’s compensation and property insurance by limiting attorney’s fees also failed.

Property insurers say lawyers for contractors who get consumers to sign over control of insurance payments — known as assignment of benefits  or AOB — are inflating claims like roof and plumbing leaks and driving up rates.

“Florida’s hardworking families should remember this – the Florida Senate chose to side with anti-consumer special interests, instead of stepping up and protecting consumers from an AOB loophole that has attracted plaintiffs’ attorneys like gold rush miners,” said Edie Ousley, vice president of public affairs for the Florida Chamber of Commerce, one of the groups supporting changes to the law. “Their failure to act means homeowners will be forced to spend more on property insurance in the coming year and home ownership will become less affordable for many Floridians.”

 

 

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.

Historic no-fault PIP repeal set for July 1, 2018 under House bill

A bill to repeal Florida’s no-fault car insurance system after almost 50 years moved within one step of final passage in the state House on Tuesday, potentially bringing rate relief to drivers in a way that a Senate version would not.

Florida requires some of the lowest coverage amounts in the country yet drivers pay among the eight highest premiums.

Accident victim Paul Davidson: “For the life of me, I don’t see the purpose of PIP.” (Damon Higgins/Palm Beach Post)

In an amendment on the chamber floor, lawmakers pushed back the effective date to July 1, 2018 from Jan. 1 to allow time for insurers and drivers to prepare.

The PIP system is “broken and does not serve its purpose any longer, ” said sponsor Rep. Erin Grall, R-Vero Beach.

HB 1063 would end the state’s requirement that drivers  buy $10,000 in Personal Injury Protection to cover a driver or passenger’s own injuries in minor car accidents no matter who is at fault. The system was created in 1971.

Under the bill, Florida would join most other states by requiring bodily injury liability coverage to cover injuries to others, in this case $25,000 per person and $50,000 per accident.

An actuarial study lost fall found repealing PIP could save Florida drivers up to $81 per car even after increases in some other kinds of coverage. Drivers saved an average of 5.6 percent with 25/50 BI coverage.

A Senate bill still working its way through committees, SB 1766 by Sen. Tom Lee, R-Thonotosassa, would make similar moves but also require $5,000 in medical payments coverage. Lee said the reason is to make sure drivers with no health insurance have some coverage to help pay emergency bills.

Grall has said that essentially reconstitutes PIP under another name and wipes out savings for most drivers, forcing the vast majority to duplicate medical coverage they already have from Medicare, employer plans or other sources.

Bicyclist Paul Davidson of Boynton Beach told The Palm Beach Post a collision with a vehicle knocked him 60 feet and caused permanent disfiguration of his face last year, but its driver was not required to carry any coverage for hurting others. That left him to pay more than $10,000 out of pocket even after his health insurance kicked in, he said.

“For the life of me, I don’t see the purpose of PIP,” he said. “Basically the other individual bore no responsibility at all for what happened.”

 

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.”

Kill PIP: Bill to end costly no-fault insurance system passes panel

After almost half a century, Florida drivers would no longer be forced to pay for expensive and fraud-prone no-fault car insurance that duplicates their health coverage under a bill that passed a state House subcommittee 12-2 Monday.

“I think it’s time and there is public outcry,” sponsor state Rep. Erin Grall, R-Vero Beach said.

Rep. Erin Grall, R-Vero Beach

Drivers would save an average of about $81 per car even after buying bodily-injury liability coverage, as HB 1063 requires and most states do as well, according to a state-commissioned actuarial study last fall. Some 24 states have dropped no-fault systems in recent decades, but Florida has hung on to its program started in 1971.

The change would take effect Jan. 1, 2018.

The bill replaces Florida’s requirement for $10,000 in Personal Injury Protection 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 it, supporters said.

It would represent a big change and faces considerable resistance after more than four decades. Several legislators congratulated Grall for having the “courage” to bring it up. Opposition from several industries was evident at Monday’s insurance and banking subcommittee hearing.

Many medical providers want PIP replaced, if it all,  with a similar amount of required medical payments coverage.

“One thing PIP does right is it does give drivers some access to quick payment to cover emergency medical expenses,” said Fraser Cobbe, representing the Florida Orthopaedic Society.

But requiring “medpay” essentially renames PIP and wipes out most of the net driver savings that a state actuarial study projected last year, supporters said.

“I do believe that medical payments is a duplication for people who already have health insurance, ” Grall said.

Representatives of insurance companies including State Farm and Nationwide expressed various level of support but said they wanted the legislation to include reforms to “bad faith” laws they say will bring down legal costs associated with claims in court.

Some legislators questioned the need to attach that issue to the bill as “bad faith” reforms would increase driver savings less than 1 percent. A Pinnacle Actuarial Resources study projected average savings of 9.6 percent on liability coverage and 6.7 percent on the overall car insurance bill for drivers by dropping PIP.

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 Personal Injury Protection that covers a driver or passenger no matter who is at fault in an accident.

The state’s 2012 “reforms” that reduced non-emergency benefits to $2,500 merely saw more claims suddenly billed as emergencies — from 40 percent to 96 percent, repeal supporters said.

Meanwhile, PIP rates continue to rise. They have shot up 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 PIP needlessly duplicates medical coverage they already have from health plans including Medicare.

It’s absolutely ridiculous,” said driver Dick Natalizio of Palm Beach Gardens. “In Colorado, they got rid of no-fault and their premiums went down 35 percent.”

 

Fla. insurance chief responds on Post no-fault story

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.

Florida Insurance Commissioner David Altmaier
Florida Insurance Commissioner David Altmaier

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.