Florida lawmakers are poised in the coming year to make another run at repealing the state’s no-fault auto insurance system, which critics charge is subject to fraud, high costs and excessive civil litigation.
State Sen. Tom Lee (R-Thonotosassa) has already introduced Senate Bill 378, which would repeal provisions of the personal injury protection (PIP) statute and move to a more tort-based system. But not everyone is on board with the changes proposed by Lee.
“In its current form, SB 378 does not have any bad-faith fixes and has a mandatory medical pay offer, which would result in significant costs to Florida consumers and no real fraud-fighting protections,” Logan McFaddin, assistant vice president of state government relations for the American Property Casualty Insurance Association (APCIA), told the Florida Record in an email.
In the APCIA’s view, the number of uninsured drivers on Florida roads would rise if SB 378 were to pass.
“Florida already has the highest rate of uninsured motorists in the nation at 23 percent,” McFaddin said. “We simply can’t afford to add more to that already alarming statistic.”
Others involved in the insurance industry have complained that trial attorneys and others have been involved in filing questionable PIP claims and lawsuits. Indeed, the Florida Office of Insurance Regulation reports that in recent years, the number of auto accidents has been steady, but PIP claims and payments have accelerated.
PIP claims also make up an oversized number of insurance fraud referrals, according to the office.
Jeff Grady, president of the Florida Association of Insurance Agents, agrees that PIP produces a high degree of litigation and fraud. But Grady told the Record in past interviews that efforts to change the system attract a large number of stakeholders – insurers, medical providers, attorneys – leading to differences of opinion on the details of repeal legislation.
“While broken, it’s in a stalemate to fix it,” Grady said. “... In no fault, the system has become well understood by people who want to game it."
The result is staged accidents, a high percentage of uninsured motorists, and litigation mixed in, he said.
Initially, PIP was adopted to provide drivers with up to $10,000 for immediate medical expenses, rather than using the court system to determine who was at fault for an auto accident. But the resulting system has been costly and inefficient, according to critics. A study published by Insure.com earlier this year found Florida auto premiums to be the third highest in the nation.