Legislation sponsored by Rep. Erin Grall (HB 771) to repeal Personal Injury Protection faced a slew of opposition in the House Insurance and Banking Subcommittee Tuesday.
Most of the concerns centered on the state’s bad faith laws, which establishes an obligation on behalf of insurance companies to defend their policyholders against third-party lawsuits. Despite that, the bill easily passed the committee.
Under the no-fault system, drivers are required to carry personal-injury protection, or PIP, coverage to help pay medical bills after accidents. Motorists are required to carry $10,000 in PIP coverage, an amount unchanged since 1979.
Lawmakers in both chambers have floated the idea of ending the no-fault system almost annually since trying to reform PIP in 2012.
Grall’s bill would replace PIP no-fault vehicle insurance with bodily injury coverage. It would require drivers carry at least $25,000 in liability for the death or injury of one person in a crash and $50,000 for the injury or death of two or more people in a crash. It would retain the existing $10,000 coverage for property damage. The bill would also mandate insurance companies offer drivers $10,000 in medical payments unless consumers opt out in writing.
Grall argues that despite changes lawmakers passed in 2012 to PIP, premiums continue to rise.
“It is time that we make a policy decision that favors personal responsibility over that no-fault system,” she said.
Several subcommittee members voiced frustration with the PIP system. Democratic Rep. Al Jacquet said as a legislator and a defense attorney, he supported Grall’s legislation.
“I can’t help but think when we make sure that Floridians have a higher amount of coverage, we’re actually helping the costs go down,” Jacquet said.
But opponents were less optimistic about the potential results of Grall’s legislation. Insurance companies said they opposed the bill unless lawmakers also tackle changes to Florida’s bad faith law.
“Right now, a claimant can refuse to provide documents and ignore phone calls and emails, but then set arbitrary deadlines for a settlement,” said Kathy Maus, an attorney with Florida Justice Reform Institute. “They’re hoping the insurer misses the deadline, so they can sue the insurer for 100 times the policy limits or more.”
Grall argues that PIP lawsuits are already a major driver of litigation in the state. She said there were 60,000 lawsuits in 2017, up 20,000 from the previous year.
Opponents also took issue with the opt-out provision. They said that because it’s on the consumers to take action, most drivers will retain that coverage without realizing it’s optional. Some insurance companies said they fear premiums will rise.
Physician groups also opposed the legislation. Chris Nuland with the Florida Chapter of American College of Surgeons said the group is concerned health insurance premiums will go up, causing more Floridians to become uninsured. About 12% of state residents currently don’t have health insurance.
Subcommittee Chairman Bryon Donalds, a Naples Republican, said he wanted to see where the proposal goes as PIP is now being used as a “quasi-health care system.”
“For people in our state who just simply carry PIP just to get their insurance on the road, PIP in and of itself is not enough to deal with actual accidents when they occur on the roadways of Florida,” Donalds said. “If we actually look at the actuarial risks associated with auto accidents, no matter how else you feel about any other measure of this bill, it is clear that PIP is simply not enough.”
Senate Infrastructure and Security Committee Chairman Tom Lee is sponsoring a similar bill ( SB 371). His legislation would require drivers opt-in for the medical payments, rather than opt-out as Grall’s bill does. Lee’s bill passed his committee and is waiting for action in the Senate Banking and Insurance Committee.
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The News Service of Florida contributed to this post.