'PIP' repeal hits wall in Senate
By Jim Turner, News Service of Florida
TALLAHASSEE, Fla. - A Senate panel Wednesday rejected a measure that would eliminate Florida’s no-fault auto insurance system, with opponents arguing the proposal could lead to a slight increase in costs for motorists.
The Health and Human Services Appropriations Subcommittee overwhelmingly voted against the measure (SB 150), which called for repealing the system that requires motorists to carry $10,000 in personal-injury protection, or PIP, coverage. The bill would have led to requiring bodily-injury coverage as a replacement.
The House approved a different version of the proposal (HB 9) during the first week of the annual legislative session, which is scheduled to end March 9.
Technically, the repeal proposal by Sen. Tom Lee, R-Thonotosassa, is still alive.
Immediately after the vote, subcommittee Chairwoman Anitere Flores, a Miami Republican who voted against the bill, made a motion to reconsider and then “temporarily postponed” the bill --- a procedural move that could allow it to come up again.
Even with the maneuver, Flores said after the meeting she didn’t know the future of the bill, as her subcommittee isn’t expected to meet again. The other option would be for the bill to be moved to a different Senate panel.
Lee wasn’t optimistic about either route.
“I’m not really sure what the plan is right now,” he said. “It’s going to be a heavy lift.”
Lee noted it didn’t help that Insurance Commissioner David Altmaier voiced concerns with the bill, which was an indication there isn’t support from Gov. Rick Scott or state Chief Financial Officer Jimmy Patronis.
Scott had backed an effort in 2012 to reform the no-fault system, which has long faced reports of widespread fraud leading to higher insurance rates.
Lee also contended his proposal is being held up by people seeking changes in the state’s “bad faith” insurance laws.
The subcommittee rejected an amendment by Sen. Kathleen Passidomo, R-Naples, that would have made changes to the bad-faith laws.
Bad-faith lawsuits typically involve allegations of misconduct by insurers that handle claims and can be costly.
The Personal Insurance Federation of Florida, the Florida Justice Reform Institute and the Institute for Legal Reform, an offshoot of the U.S. Chamber of Commerce, are among those that have sought to address changes in bad-faith laws as part of a no-fault repeal.
The House effort has avoided the bad-faith issue. Rep. Erin Grall, a Vero Beach Republican sponsoring the House bill, has said the issue would make the proposal “more complicated than it needs to be.”
The Senate bill, which had idled since getting approved by the Senate Banking and Insurance Committee on Jan. 10, drew fire this week from the Florida Chamber of Commerce and the Property Casualty Insurers Association of America, which launched separate videos arguing the proposed changes would increase costs for motorists.
“Caution alert: Florida state senators want to pass a new law making you pay more for your car insurance,” an ad from the Chamber said. “The bill will force you to pay more for higher mandatory coverage whether you need it or not. Worse, the bill will force you to buy even more coverage over the next five years.”
The House version would require a minimum bodily-injury coverage of $25,000 for damages for injury or death of one person and $50,000 for injury or death of two or more people.
Lee's proposal, starting Jan. 1, would set a minimum of $20,000 for bodily injury protection that includes coverage for the injury or death of one person and $40,000 for injury or death of two or more people. Two years later, individual premiums would be expected to increase, as the minimum coverage would grow to $25,000 and $50,000.
Also, Lee’s proposal would require motorists to carry $5,000 in what is known as medical payments coverage, or MedPay. Critics have argued that the MedPay coverage requirement would make Lee’s proposal a light version of the current system.
Lee said it was an oversimplification to call his bill “PIP by another name.”
The House version is projected to save motorists on average about $81 a year, with the amount varying depending on a driver’s history and location in the state. Lee’s version carries a projected $8 to $12 a year increase, again depending upon where the motorist lives.
Critics contend the Senate increase could be much higher, up to 60 percent or 70 percent, depending on the changes required in coverage.