At a Senate hearing Tuesday, lawmakers took testimony from the Office of Insurance Regulation, industry lobbyists and lawyers about the impact of scrapping the 41-year-old personal injury protection system, which pays for the first $10,000 of medical bills and lost wages regardless of who is at fault in an accident.
"We are warming up to this idea," said Michael Carlson, executive director for the Personal Injury Federation of Florida, which represents State Farm, Allstate and Progressive.
Florida lawmakers last year spent months working on a revamp to the PIP law, which insurers say is beset by fraud. But with a recent court ruling calling into question the constitutionality of those changes, lawmakers are debating whether to scrap the whole system and allow victims to sue at-fault drivers.
State Sen. David Simmons, R-Altamonte Springs, said that the Legislature has "dealt with" PIP changes every four to five years in hopes that costs would decrease for drivers. But that's never happened, he said.
Simmons' proposal would scrap PIP for bodily-injury coverage, requiring a policy with limits of $25,000 for a single person and $50,000 per accident medical care and damages. It would also have a $10,000 limit for property damage.
Sandra Starnes, director of Property & Casualty Product Review for the Office of Insurance Regulation, told lawmakers that 90 percent of motorists already buy bodily-injury coverage.
Simmons is hoping that the BI system would root out the fraud that has plagued PIP by making people go through the court system – though rampant fraud is what prompted the switch to no-fault in 1972.
But it's unclear whether lawmakers will approve the change by the May 3 end of the legislative session.
Last year, lawmakers spent months trying to cobble together a PIP reform package before coming to an 11th-hour agreement. They promised the bill would reduce rates, but there's been little change so far and the court decision may impede any further progress.
Under the changes, accident victims must see a doctor within 14 days and only "emergency medical" treatment warrants a full $10,000 payout. All other treatment would be capped at $2,500 – and PIP would not pay for acupuncture or massage therapy.
The bill required that insurers reduce their PIP premiums by 10 percent last Oct. 1 and by 25 percent by next January. However, they were not forced to do so and must only explain why if they don't.
According to the state Office of Insurance Regulation, State Farm, the state's largest insurer, increased its PIP costs 7.9 percent after the bill passed, and Nationwide raised rates 10 percent. Progressive cut its PIP premium by 1.2 percent.
Copyright © 2013, South Florida Sun-Sentinel
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