Florida drivers pay among the nation’s highest insurance premiums for relatively low coverage amounts, a state Senate panel heard this week as discussion began on whether to end the state’s no-fault system after four decades.
“Florida has the fifth-highest auto premiums in the country despite its mandatory limits being relatively low,” said Ron Jackson, vice president for state affairs for the American Insurance Association. “Unfortunately a no-fault system has not achieved the goals set for it.”
He said failed goals include lowering consumer rates or reducing lawsuits, because Florida’s system just creates fresh piles of litigation on its own.
Dale Swope, president-elect of the Florida Justice Association and a Tampa attorney, called it a “failed social experiment.”
Lobbyists for hospitals and doctors told the Senate banking and insurance committee they disagreed. They argued for keeping a state requirement that drivers buy $10,000 of Personal Injury Protection to cover a driver or passengers regardless of who is at fault in an accident.
“At least there will be some coverage for patients in the emergency room,” said Jeff Scott, general counsel for the Florida Medical Association.
But many careful drivers have told The Palm Beach Post they resent paying for PIP as a fraud-prone and inefficient “double taxation” that duplicates medical coverage they already have. Even if they never get in an accident, the state-mandated PIP coverage often accounts for 20 percent or 25 percent of their overall car insurance bill, and PIP rates have shot up more than 25 percent since the start of 2015, according to state officials.
An actuarial study released in September found Florida drivers could save $81 a car, and close to $1 billion a year, if the state dropped PIP. That was a net savings after an assumed increase in premiums for other coverage such as bodily injury liability insurance.
Florida is one of only 12 states that retain a no-fault system, and three of those give consumers a choice of coverage options, officials said. Nearly all of the 38 other states require bodily injury liability insurance instead.
Options in Florida include dropping PIP with no new requirements, like New Hampshire, or requiring bodily injury liability insurance, which more than 90 percent of Florida drivers already have.
Savings for drivers would shrink to almost nothing, this past fall’s actuarial study found, if lawmakers do what some medical trade groups propose: require medical payments coverage.
That slightly reshapes but mostly renames PIP, even as lawsuits accuse some hospitals of charging exorbitant fees for scans that use up the $10,000 benefit in a single day. It does not address the frustration many drivers express at having to pay again for medical insurance they already have, yet without the cost controls built into Medicare or most private insurance.
Florida Senate insurance chairman Anitere Flores, R-Miami, said legislation is likely coming before the committee, though she did not specify when. She said she wanted to keep a focus on two things — how it affects consumer rates, with protections to make sure savings get passed to drivers.
“That will be coming to a theater near you soon,” Flores said.