‘Lying through their teeth’: How PIP repeal died in the Florida Senate

Updated March 01, 2018
Repeal of the state’s no-fault car insurance system failed this week in a heated meeting of a Florida Senate subcommittee. (State archive photo)

A room full of industry lobbyists and Florida’s insurance commissioner converged to defend the state’s no-fault car insurance system against a repeal effort in the state Senate, leaving the state among a few keeping a no-fault plan and its drivers paying among the top six average U.S. premiums.

One legislator asked if rates would go up 71 percent in Broward County after repeal. Florida Insurance Commissioner David Altmaier called that a “reasonable assessment.” A lobbyist representing major insurers assured senators “everyone” studying the issue concluded repeal would push rates up in Florida, never mind records of rate reductions in states that dropped no-fault plans including Colorado, Georgia and Connecticut.

“These people don’t care about the rate increases that they’re lying through their teeth are going to happen,” said SB 150 sponsor Sen. Tom Lee, R-Brandon. “I think a lot of the information you’re hearing today is not really honest.”

A 6-1 no vote in the Senate appropriations subcommittee on health and human services Wednesday effectively orphaned a bill the Florida House passed 88-15. The House bill would repeal the state’s requirement that drivers buy $10,000 of Personal Injury Protection to cover the driver’s own injuries in an accident, regardless of who is at fault. HB 19 instead would require drivers to buy bodily-injury liability coverage to take responsiblity for harm to others, as 48 other states do. Most Florida drivers already buy BI voluntarily.

A state-commissioned actuarial study found House-style repeal would save drivers an average of $81 per car or 6.7 percent on overall bills.

Florida drivers pay among the nation’s most expensive premiums, more than $1,250 on average. What’s driving that? PIP rates rose up to 54 percent among the state’s top 25 insurers since the start of 2017 alone, and on average 35 percent faster than overall premiums, The Palm Beach Post reported.

Though PIP was designed in the 1970s to avoid litigation, PIP lawsuits rose to a record of more than 60,000 in 2017, jumping close to 50 percent in one year, the Post reported. Lee mentioned that statistic Wednesday.

But the vote in the Senate panel all but guarantees Florida will keep PIP for another year.

The Senate version, SB 150, required drivers to buy $5,000 of medical payments coverage, which doctors and hospitals wanted but opponents called recreating PIP under another name and wiping out driver savings. Still, the continued existence of a Senate bill offered a chance to negotiate with the House.

“Voting for the bill keeps alive the hope for consumers of a better auto insurance system,” urged Brad Nail, a senior manager for insurance and public policy for ride-sharing company Uber. His company gets a nationwide view on insurance matters, he told senators. States that stick with no-fault systems are consistently “plagued with higher costs,” he said.

Insurance lobbyists urged no votes. Some produced online videos calling for its defeat. Insurers insisted on lawsuit reforms that have stalled for years, were not in either PIP repeal bill as introduced, and are contained in other bills this session. They found an ally in the state’s insurance commissioner.

“We are respectfully and regretfully opposed,” Altmaier said.

A legislator said she heard rates would go up 71 percent in Broward County after repeal. Altmaier called that assessment reasonable. He spoke about a subset of drivers who buy only the state-required minimum including $10,000 of PIP. They represent about 7.6 percent of drivers in the county, according to a Pinnacle Actuarial Resources Inc. report.

Altmaier chose not to mention other drivers. He chose not to mention savings the Pinnacle study projected for the majority of drivers under the House bill, nor any savings from eliminating recurring fraud in a PIP system designed to churn out payments almost automatically.

“It was important for the Commissioner to note the dramatic impact that repealing PIP could have for some of the more than 1 million Floridians with minimum limits, and to point out that many of the concerns raised with the PIP system are not premium related, and could migrate to a new BI system,” a spokeswoman for the state’s Office of Insurance Regulation said Thursday.

Also unremarked: Most Florida drivers have health insurance such as Medicare or employer plans that mean they do not need PIP to pay for their own injuries. Yet they are forced to pay for its rate increases each year, even if they never get in an accident.

“PIP is worthless,” driver Leo Solar of West Palm Beach said last month. “It’s just like throwing your money away.”

The six-month PIP premium Solar paid last November was $249.30. It jumped more than 40 percent from the $175.46 he paid in November of 2015.

But to hear insurance lobbyists talk, the urgent threat was not what is happening to rates now, but what would happen if PIP were repealed.

Michael Carlson, president of the Personal Insurance Federation of Florida and representing insurance companies covering about 4 million Florida drivers, told legislators even the Pinnacle study projected higher rates.

“Everyone concludes there will be some rate increase for Floridians,” Carlson said.

Lee said he felt like a man who had to managed to “kick the top off an anthill.”