No-fault insurance in legislative sights

WEST PALM BEACH, Fla. -- Getting T-boned by another driver in West Palm Beach was the first surprise, Lynn Sparks said. Another was learning Florida is one of only two states that do not require drivers to carry liability insurance to cover injuries to others.

That's why she will watch closely to see whether state legislators are ready to make big changes when they convene Tuesday -- and take up bills as early as the first three days to repeal the state's no-fault car insurance system after nearly half a century.

Florida requires $10,000 of personal injury protection to cover a driver's own injuries regardless of who is at fault in an accident. But Sparks said her medical bills for neck and spine problems including three bulging discs quickly ran to twice that amount.

"That was my first accident ever," she said. "It wasn't at all what I was expecting. I thought her insurance company would take care of my bill."

Florida drivers pay among the seven-highest average premiums in any state, more than $1,200 a year, for some of the lowest required coverage, according to data released last year by the National Association of Insurance Commissioners.

Billions of dollars are at stake for drivers, hospitals, doctors, lawyers and others as legislators decide whether to repeal the PIP system in the next 60 days -- and importantly, how they would do it under different House and Senate plans.

Sparks, who lives in Stuart and works in West Palm Beach, said she had to press her own car insurance company to cover her unpaid bills under an uninsured motorist policy for her 2016 claim. Later she noticed her premiums rose more than 10 percent.

"The rest of us are paying for it," Sparks said. "It drives me crazy."

On the other side of the issue, driver Brandon Notowitz of Delray Beach said he sees benefits to the current system. It provided medical care for neck, back and shoulder injuries promptly after he was hit in a rear-end accident at a light, he said.

"It definitely worked for me," said Notowitz, 34.

He figures he might have been facing loans, a hit to his credit score or missed work time while he waited for the other driver's insurance company to act on the claim, if not for the $10,000 PIP benefit.

"Without the PIP, I would have been stuck," he said.

But double-digit premium increases and recurring fraud have made PIP unsustainable for a $10,000 benefit that has changed little since the 1970s, sponsors of repeal bills in both chambers say. The difference is how they would replace it.

Repealing PIP could save Florida drivers 6.7 percent on their overall insurance bills, an actuarial study commissioned by the state in 2016 found. That is after an expected bump in premiums for bodily-injury liability coverage, which would be required at $25,000 per person and $50,000 per accident.

The House bill, HB 19, offers the greatest chance for responsible drivers to save up to $81 per car and close to $1 billion collectively each year. That bill, sponsored by Rep. Erin Grall, R-Vero Beach, could come up for a vote on the House floor as early as Thursday. A similar bill passed the House by a wide margin last spring, though the Senate never acted on it.

The savings would be largely negated under the Senate plan, SB 150, however. The average premium would actually rise slightly from $1,209.51 to $1,213.69 once the full requirements were in place, according to a Senate staff analysis.

That's because SB 150, which could be heard in the Senate banking and insurance committee Wednesday, repeals PIP and requires bodily injury liability coverage -- but also requires drivers to pay for $5,000 of medical payments coverage.

It would "protect hospitals, frankly," sponsor Sen. Tom Lee, R-Thonotosassa, told fellow lawmakers last month.

Hospital lobbyists say medical centers are required to treat emergency patients regardless of their ability to pay, so they want required medical payments coverage if PIP goes away.

But the Senate bill would continue to force all drivers to buy what motorists like Dick Natalizio of Palm Beach Gardens consider duplicative, costly and unnecessary medical coverage on their car insurance.

"I have Medicare," he said last year. "They force me to buy PIP. It's so ridiculous."

One option would be to require medical-payments coverage only for drivers without qualifying health insurance, so the vast majority of drivers could find relief in their rates.

A requirement to carry bodily-injury liability coverage won't be a major change for the majority of drivers. More than 90 percent of drivers in Florida and Palm Beach County already carry some amount of it, state regulators have reported.

About 6.6 percent of Florida drivers, or 6.5 percent in Palm Beach County, carry bare-bones minimum coverage including $10,000 PIP, according to a report Florida commissioned last year from Pinnacle Actuarial Resources Inc.

A big problem with required medical coverage, such as PIP, is drivers pay for rate increases in their region even if they never get in an accident. Florida's top 25 insurers raised PIP rates up to 40 percent, and an average of 25 percent, in 2015 and early 2016, state records showed.

Defenders of the current system, including law firms that specialize in PIP litigation, say the House bill especially is not the right answer.

"Now that Obamacare has no mandated coverage provisions, there is going to be an uptick in uninsured drivers," said Barry Aronin, director of PIP litigation for LaBovick, Labovick and Diaz in Palm Beach Gardens. He also warns of a "rash of new lawsuits" if Florida moves to a tort system like most states have.

But other lawyers, including executives at the Florida Justice Association, say careful Florida drivers pay the price when others evade responsibility for injuries they cause. It's time for Florida to join nearly every other state in requiring liability coverage, they say.

"We're totally confident leadership in both chambers wants to see a responsible roadway system in Florida," said Jeff Porter, the group's legislative and political director.

Charles Elmore writes for The Palm Beach Post. Email: celmore(at)pbpost.com.

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