January 8, 2017
Florida legislators have a chance to save drivers close to $1 billion a year by ending the state’s no-fault car insurance system after nearly five decades, but not if they adopt a Senate version expected to be considered a day after the session opens Tuesday, an industry group said.
SB 150 sponsored by Sen. Tom Lee, R-Brandon, would require both bodily-injury liability coverage and $5,000 of medical payments coverage, eventually raising driver premiums according to staff analysis. The medpay insurance would force the vast majority of drivers to pay again for medical insurance they already have, not unlike the Personal Injury Protection system it would be replace.
“We respect the Senate’s prerogative in taking up an important public policy issue like PIP repeal, but this bill overreaches in a way that will increase premiums for many motorists,” said Michael Carlson, president of Personal Insurance Federation of Florida, said in a statement Monday. Its members include Allstate, Farmers, Progressive and State Farm.
In contrast, the House bill, HB 19, would not require medical payments coverage. It could be considered by the full House as early as Thursday, potentially saving drivers up to $81 per car according to a 2016 actuarial report commissioned by the state.
The Senate bill’s sponsor says it is designed to protect hospitals by making sure all drivers have some basic coverage, because medical centers are required to treat them in an emergency. It is expected to be heard in the Senate banking and insurance committee Wednesday.
“For drivers who may otherwise benefit from potential savings created by repeal of PIP, adding a mandatory medical payments coverage will erode these savings,” Carlson said. “For Floridians who have health insurance and are forced to buy medical payments coverage, this will be a double whammy.”
PIFF’s position: Mandatory coverage levels should not be set so high they increase the cost of insurance and drive up the number of uninsured drivers.
“There should be no mandatory first-party medical payments coverage, which is freely available in the market today, and would be redundant for Floridians who already have health insurance,” the group said.
Along with other insurer groups, PIFF wants reforms to Florida’s third-party “bad faith” law they say benefits lawyers but hurts insurers and raises costs. Lawyer groups oppose mixing that issue into the bill, presenting the risk of a scuttling morass.
Florida is one of two states that do not require liability insurance to cover injuries to others. It requires drivers to buy $10,000 worth of Personal Injury Protection to cover each driver’s own injuries, no matter how much insurance they already have from Medicare, private health plans or other coverage. The system has labored under a long history of bill-padding and fraud, and under PIP, hospitals in Palm Beach County and across the state have charged up to 65 times what Medicare pays for scans to detect injuries, according to lawsuits.
Frustrated drivers say they are forced to pay for rising PIP rates even if they never get in an accident. Insurers raised PIP rates up to 40 percent and an average of 25 percent in 2015 and early 2016, state records show.