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House Panel Approves 'PIP' Repeal, But Differences Remain

Rep. Erin Grall, who has sponsored the repeal effort for five years, said drivers with just PIP policies aren’t adequately covered under the system’s $10,000 coverage, which was set in 1979.

By Jim Turner | March 11, 2021 at 02:08 PM

Erin Grall

Rep. Erin Grall. Courtesy of Florida House of Representatives.

TALLAHASSEE --- The Florida House and Senate will have to work out differences if they want to end Florida’s longstanding no-fault auto insurance system, while the state’s insurance commissioner remains hesitant on the repeal effort.

The House Civil Justice & Property Rights Subcommittee unanimously approved a bill Wednesday (HB 719) that would eliminate no-fault --- and its requirement that motorists carry personal-injury protection, or PIP, coverage --- and mandate bodily injury coverage.

Rep. Erin Grall, a Vero Beach Republican and attorney who has sponsored the repeal effort for five years, said drivers with just PIP policies aren’t adequately covered under the system’s $10,000 coverage, which was set in 1979.

“We are talking about putting in place something that would give potentially two-and-a-half times more coverage to people after they are in an accident at the fault of someone else,” Grall said. “I mean, this restores responsibility to our roadways.”

Grall added that the current system is a “predatory scheme of reimbursement rates,” and her proposal should eliminate the more than 60,000 litigated PIP claims annually.

But representatives of the insurance industry expressed concerns that the change could result in more litigation, shift health-care costs and force people now struggling to pay for just PIP coverage to go without insurance while on the road. The $10,000 in PIP coverage helps pay for health-care costs after motorists are injured in accidents.

“Even having health care coverage for some consumers might still leave consumers exposed in the event that they're injured by an at-fault driver who doesn't have insurance, which is very likely to happen,” Florida Insurance Commissioner David Altmaier said. “That's going to probably increase litigation and things of that nature. It's going to drive up costs for health insurance, as well as auto insurance and it's going to exacerbate the current uninsured problem that we have in the state on both those fronts.”

Altmaier added that despite “fair criticisms” of PIP and auto insurance in general, he remains “hesitant” on the repeal.

“We are not convinced that those issues will be solved if we repeal PIP and go to a mandatory BI (Bodily Injury) framework,” Altmaier said.

As with a Senate proposal (SB 54),  the House measure would end the requirement of carrying $10,000 in PIP coverage on Jan. 1, set minimum bodily injury coverage at $25,000 for the injury or death of one person and $50,000 for injuries or deaths of two or more people. The proposals also would require auto insurers to offer at least $5,000 in what is known as medical payments coverage, though motorists would not be required to buy it.

The Senate proposal, which has passed two committees and will go before the Rules Committee on Thursday, also would offer lower bodily injury coverage requirements for students and low-income motorists. They would be required to carry $15,000 in coverage for a single injury or death and $30,000 for two or more victims.

But perhaps the biggest difference in the bills is a Senate proposal to address “bad faith” lawsuits, which involve allegations that insurers have not properly looked out for the interests of their customers. Insurers and business groups have long lobbied to curb bad-faith cases, which can be costly for insurers. Such changes have been opposed by plaintiffs’ attorneys.

The House bill does not address bad faith, with Grall reluctant to include it. The issue has been a thorn as the House and Senate have considered measures in the past to repeal the no-fault system.

Julius Parker, representing the Florida Justice Reform Institute, a business-backed lobbying and legal group, said the bad-faith system in Florida is broken and needs the Senate changes, “which would provide some protections to an insurer. Specifically, notice of a claim, a clear opportunity to settle the claim, and a clear time period in which to investigate the claim and decide whether or not to pay it.”

The bills also have spurred disagreements about the financial impacts to motorists if no-fault is repealed and potential cost shifts to the health care industry. 

“We cannot support a wholesale change to the auto system without accurate data to show how these changes will affect Floridians across the whole socio-economic spectrum, that includes the lower rung, not just an average and where some of us might see a decrease,” said George Feijoo, a lobbyist for the Florida Insurance Council.