One more year on the road for no-fault auto insurance?

Aug 18, 2011

The following article was published in the Florida Current on August 18, 2011:

One more year on the road for no fault auto insurance?

By Christine Jordan Sexton

As calls for tackling Florida’s personal injury protection program grow louder one influential lawmaker has made clear he doesn’t want to scrap the long standing system that pays $10,000 in health care costs regardless of which driver is at fault.

Rep. Bryan Nelson, R-Apopka, said he believes the program can be altered to address some of the problems that have been bedeviling the system if the Legislature were to adopt fee caps and utilization schedules and agree to limit attorneys’ fees, similar to what the Florida Legislature accomplished with workers’ compensation in 2003.

Nelson is chairman of the House Insurance and Banking Committee, which will likely hear any PIP related bills the Legislature tackles in the 2012 session.

“We need to give it one more shot and try to fix it,” Nelson said of PIP. “If we can’t fix it, then we’ll flush it.”

An insurance agent, Nelson said his goal is to reduce insurance premiums for Florida drivers by $1 billion.

Nelson is the latest politician to chime in on whether the state’s no fault system be eliminated or at a minimum retooled. Gov. Rick Scott said earlier this summer he could support eliminating the no fault insurance program but at a Cabinet meeting on Tuesday said he would wait to follow the lead of Insurance Commissioner Kevin McCarty.

McCarty–who has served as insurance commissioner under Govs. Jeb Bush, Charlie Crist and now Scott–said he was going to meet with legislators in the coming weeks to discuss the issue. 

McCarty gave a lengthy presentation at the Cabinet meeting showing that PIP benefits paid have increased by more than $500 million since 2008 even though the number of licensed drivers has remained steady and the number of accidents has dropped.

A decision was made in 2003 to allow the program to expire but a coalition made up of hospitals, health insurers companies and some automobile insurance carriers successfully lobbied to modify the program and have it reinstated into law.

When the insurance industry supported organization the National Insurance Crime Bureau released a report earlier this year revealing the percentage of questionable PIP claims in Florida rose 34 percent from 2008 to 2010 legislators once again re-examined the program in 2011. The NICB rated Miami, Tampa and Orlando among the top five cities in the nation for questionable claims.

The Office of Insurance Regulation also released the Report on Review of the 2011 Personal Injury Protection Data Call, which showed that costs in the PIP system are increasing and that PIP payouts have gone from about $1.5 billion in 2008 to approximately $2.5 billion in 2010. The OIR report also showed that Florida PIP claims involve about twice as many medical treatments than the average and the costs are $4,000 higher than the average costs.

Florida is one of ten states to have no fault automobile insurance program.

This past session PIP was just one of a whole long list of insurance related the Legislature tackled including sinkholes, homeowners and medical malpractice. In the end, the legislation fell by the wayside.

PIP isn’t expected to compete with other insurance issues in 2012 though, Nelson said.

“This is a huge issue and hopefully we’ll address it in a meaningful way, not a superficial way,” he said.

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