TALLAHASSEE – Florida law regarding PIP (Personal Injury Protection) payments is evolving as the Supreme Court seeks to clarify what is considered “reasonable” when it comes to medical expenses.
PIP coverage is meant to be a way for medical expenses incurred within the first 30 days after an accident to be paid, regardless of who was at fault. Auto insurers are required to pay up to $10,000 in medical expenses under the PIP laws.
Although the PIP statute (Fla. Stat. § 627.737(5)(a)1.) has been amended over the years and specifies how covered amounts are to be computed -- for example “for emergency transport and treatment by providers licensed under chapter 401, 200 percent of Medicare” -- insurance companies are still disputing how to define what should be covered. Companies focus on the phrase “may limit reimbursement” as a way to dispute medical charges.
William Large of the Florida Justice Reform Institute feels that PIP unnecessarily complicates things when it comes to covering medical payments for accident victims. He sees the actions of the Florida legislature in regard to PIP as being of vital interest to Floridians.
“PIP is a no-fault coverage," he told the Florida Record. "It came about because an academic approached several state legislatures in the early 1970s and said there’s too much tort litigation; create a no-fault system to avoid the use of attorneys in litigation. If someone is injured in an accident, their claim will be immediately paid without the need for an attorney.”
Large told the Florida Record that although the original intention was good, “PIP devolved (not evolved) into a set of gotcha gimmicks over low dollar amounts. Attorneys are making a lot of money on small-dollar claims by playing gotcha games. Because of that, many people think the PIP is unworkable.”
PIP can no longer be salvaged, Large feels.
“There have been numerous attempts since the 1970s to fix PIP. As we sit here today in 2017, I think there’s a frustration level among many stakeholders and many legislators. Now is the time to admit that PIP can’t be fixed. Theoretically, PIP could be fixed, but those fixes would need to address the litigation abuses that are occurring, and I don’t believe the legislature has the wherewithal to end the abuses.”
Large feels PIP should be replaced with mandatory bodily injury coverage.
“If we get rid of PIP, there are four things that need to be done. First, what do you replace it with? You need to replace it with a mandatory BI (bodily injury) system. If you did, what would the limits be? There are different arguments as to what those policy limits should be. I believe they should be a low number, like $10,000/$20,000 -- $10,000 per occurrence, $20,000 aggregate.”
In his opinion, Large also sees bad faith as an issue that needs to be fixed.
“Second you need to fix the third-party bad faith, which occurs in BI cases where someone has a low-policy limit for damages, clear liability and big damages. In those cases a plaintiff’s attorney does not want to settle a case with a low limit. Instead, they want to go forward with a trial and get a big verdict, and file a third party bad faith lawsuit against the insurer.”
He continues, “Number three, you don’t want a situation with mandatory first-party medical coverage. Number four, there should not be a mandatory rating provision, in terms of what this will cost. Instead the market should decide what this type of insurance policy should cost.”
The rules regarding PIP payment calculations are tricky, even as defined by the legislature.
“PIP is complicated," Large said. "If you don’t dot every I and cross every T, an insurer is susceptible to paying a large attorney’s fee award. By adding needless complication to PIP, you’re getting away from why it was passed in the 1970s. Then every little comma and paragraph is litigated, and attorneys are making a lot of money off of this PIP system.”