Michael Carlson, Guest Columnist
February 6, 2018
Florida’s Motor Vehicle No-Fault Law, commonly known as PIP, after the personal injury protection insurance required by the law, is under attack in the Florida Legislature. Trial lawyers – those who benefit from lawsuits and attorney fees – are making a push for repeal of this system; replacing it with a tort system and “mandatory bodily injury” insurance. The legislation they propose isn’t good for Florida; it reduces choice and will raise the cost of auto insurance for many consumers.
In 1971, Florida adopted the PIP law as a means of ensuring prompt and fair payments for injuries resulting from car crashes. The law requires that every driver have PIP coverage of $10,000. It is “no-fault” because you don’t have to prove the fault of another person in order to recover PIP benefits. You simply file a claim if you have been injured.
The PIP law has faced many challenges. In the 1970s criminals figured out that it was relatively easy to file phony claims and get paid. We saw a rise in “staged accidents” and fake medical clinics, which led to increased insurance costs. The Florida Legislature amended the law several times over the years to combat fraud, to increase benefits and to control costs.
Today, trial lawyers argue that mandatory bodily injury coverage is fair because it requires fault to be proved before benefits can be paid. This may require a lawsuit, which can delay payment of these benefits. They also argue that the coverage should be more generous, paying a higher dollar amount of insurance proceeds than PIP provides.
However, current PIP repeal proposals do more harm than good. For many Floridians, PIP is the only medical insurance they have. For the working poor, who may not otherwise have access to insurance, this coverage can be very important. The $10,000 coverage amount isn’t a lot, but it is not intended to be a “Cadillac” health plan. And in may parts of the state it is relatively inexpensive.
The problem is that the PIP repeal bills filed in the House and Senate will increase rates for many Floridians, because they require a higher amount of insurance coverage. Instead of buying $10,000 in PIP coverage, you will be required to by $25,000 of bodily injury coverage under the House bill, and $30,000 of coverage under the Senate bill.
The Senate bill would impose a second cost on consumers by mandating “medical payments” coverage, effectively taxing those who otherwise have health insurance. For example, if you have an employer-provided medical plan or other health insurance, you will still be required to buy medical payments coverage.
And neither bill addresses a major insurance cost driver in Florida – an average of $79 per insured vehicle or about $800 million annually in auto liability claims payments caused by the threat of third-party bad faith lawsuits filed by trial lawyers.
A fair, pro-consumer repeal of PIP would let the free market set rates and coverage amounts. This could help lower the cost of the new law for many drivers.
The law should not burden consumers with the unnecessary cost of a mandatory PIP-like coverage such as medical payments. Consumers have the choice to purchase this coverage today; any legislation should protect that choice.
Finally, a reasonable fix to Florida’s unfair bad faith law will help offset any cost increases created by new higher bodily injury limits.
We hope the Legislature doesn’t pass a bill that will increase the cost of insurance for many Floridians because an influential special interest is seeking to change the law to their advantage. We urge policymakers not to accept a bad PIP repeal.
Michael Carlson is a lawyer and lobbyist. He is the president of the Personal Insurance Federation of Florida, a property and casualty trade association based in Tallahassee.