No-fault coverage required again

Jan 1, 2008

Palm Beach Post, 1/1/2008

The party’s over. And no, we’re not talking about New Year’s Eve. Mandatory no-fault auto insurance is back today, and the million-plus Florida drivers who’ve been pocketing hundreds of dollars in premium savings since October because they elected to go without the coverage will soon be hit with surcharges to resume the coverage.

But state insurance officials say the fact that three-month legislative reprieve granted when state lawmakers failed to renew the much-maligned personal injury protection, or PIP, coverage before it sunset last year is not likely to cause many problems. ‘It will be seamless,’ said Chris Neal, a spokesman for State Farm Mutual Auto Insurance Co., Florida’s largest carrier. ‘Motorists won’t have to do a thing.’ Still, state law now again requires insurers automatically tack the no-fault coverage – which includes PIP to pay up to $10,000 in medical costs and lost wages from accidents – on to the policies of the 13 million licensed Florida drivers beginning today, whether they want it or not.

That could be a little jarring for some motorists when they get a bill from their insurer, most likely this month, to pay for the additional coverage. State Farm has estimated that a Florida family with two cars that opted to forgo PIP would save an average of $360 over a year.

Insurers say policyholders with payment plans should be able to spread premium increases over a series of months.

Under no-fault, motorists cannot sue the at-fault driver for pain and suffering unless there is permanent injury. In return, injured motorists receive medical coverage from their insurers to treat injuries from auto accidents. But Florida’s definition of permanent injury is relatively weak, allowing many non-seriously injured motorists to sue anyhow.

Drivers were given a choice as to whether they wanted to maintain no-fault coverage during the three-month period between the expiration of the old law on Sept. 30 and the start of the new law on Jan. 1. The break occurred because the legislature couldn’t agree on the specifics of a new law before the old one expired.

Frustrated lawmakers found themselves buffeted by insurers calling for no-fault to be scrapped because of what they said was ”rampant fraud and abuse” and consumer advocates and hospitals warning of chaos in emergency rooms throughout the state.

They warned that those without health insurance would be left with no coverage for medical care if they were hurt in an auto accident. And hospitals hit with huge bills would be forced to curtail services.

But insurers countered that hospitals and medical providers charged excessive fees to treat those injured in accidents.

Officials said the exact number of motorists who decided to go without coverage is unavailable, but estimated it to be in the millions.

State Farm said policies insuring 800,000 Florida vehicles it covers dropped PIP. Allstate Insurance Co. said drivers of almost 600,000 vehicles decided to forgo it.