On Oct. 28, Florida’s state insurance commissioner entertained the idea of ending the state’s “no fault” auto insurance system. Lawmakers, however, are not expected to approve such a change during the next legislative session in 2016.
“Let’s just repeal PIP and do nothing,” said insurance commissioner Kevin McCarty, who appeared at a Florida Chamber of Commerce Insurance
Summit held at the Grand Floridian Resort at Disneyworld. He suggested the idea as a method to further reduce fraud in the personal injury protection (PIP) coverage system.
Although some lawmakers have suggested replacing personal injury protection (also known as “no-fault”) with a requirement for bodily-injury coverage, McCarty noted that most motorists are already covered.
“I’m not so sure that I’m ready to move to a more litigious auto system, but I think one thing to consider, particularly if we get an adverse decision on PIP, let’s fix it or flush it,” McCarty stated.
He then went on to elaborate on previous efforts to fix PIP.
“We have done everything to fix PIP you could have possibly have done. We’ve had seven sessions on PIP. … A $10,000 benefit, really. Is it worth this amount?”
Through the no-fault system, motorists are obligated to carry personal-injury protection coverage, which includes coverage for up to $10,000 in medical benefits.
When lawmakers passed the legislation change that allowed PIP in 2012, the average motorist in Florida was paying $180 a year for the personal-injury protection portion of his/her auto coverage, according to data by the Office of Insurance Regulation. The agency released information on January that the average no-fault annual payment was estimated to be around $125.
The PIP legislation required individuals involved in collisions to seek treatment within a period of 14 days and allowed up to $10,000 in benefits for emergency medical conditions with a $2,500 cap on non-emergency conditions.
While it set standards for insurers to lower their rates for personal-injury protection coverage, the law has been contested more or less continually.
In 2013, a Leon County circuit judge ruled the law illegitimately prevented the injured from using PIP coverage to pay for alternative treatment methods such as massage therapy and acupuncture, as well as restricted the number of chiropractic services covered. Eventually, the ruling was overturned.
Some lawmakers believe the law will ultimately fail a court challenge, and they have urged the state to simply replace PIP with bodily-injury coverage.
Jeff Atwater, state chief financial officer, and Gov. Rick Scott backed the 2012 changes, arguing that fraud (particularly in the Tampa and Miami regions), caused the spike in auto-insurance costs for Floridians.
Still adamant that the PIP legislation helps prevent fraud, Atwater said Wednesday that he wanted to be thoroughly convinced before calling for additional changes.
“Two years after the passage of the PIP legislation, it’s time for the insurance industry to bring forward evidence that shows whether or not rates are going to come down,” he said though a prepared statement. “If consumers aren’t going to get the relief the legislation intended, then the time to repeal has arrived.”
McCarty noted that ending no-fault would not impact a lot of motorists, but could cut the supply of capital to PIP.