Florida Legislature Passes No-Fault Car Insurance for Jan. 1 Return

Florida drivers, you may want to be a little more careful than usual for the rest of the year.

Despite the fact that it caused a lot of late nights and tension for lawmakers and lobbyists this month, most people in Florida haven’t noticed one bit that the state’s no-fault car insurance law went away last week. And most won’t notice when it is restored Jan. 1.

Unless they’re in a wreck between now and then with someone who doesn’t have personal injury protection, or PIP, coverage.

Then, they might find themselves in a position most Florida drivers haven’t had to worry about since the early 1970s – fighting a court battle over who was at fault in the crash.

The PIP law, which expired earlier this month but will be restored Jan. 1 under legislation passed Oct. 5, does two main things:

It says that every driver must buy $10,000 worth of personal injury protection coverage to pay medical bills if they’re in a wreck. And it says that when there’s a crash each driver’s injuries are covered by their PIP coverage no matter who was at fault.

That keeps accident disputes mostly out of the courts.

But lawmakers have complained for years that fraud has plagued the PIP system. There are fake crashes that send people to fake health care providers for fake injuries that are then submitted as PIP claims. There are complaints about insurers having to pay bills for dubious treatments. One lawmaker this week mentioned an insurance company that had to pay for “fish tanks for visual therapy.”

Big insurance companies pushed for the law to go away, saying the fraud couldn’t be fixed. State Farm and some others even filed for lower rates contingent on the PIP requirement expiring, saying they’d save so much money on fraud they could charge less.

But hospitals and health care providers complained that without mandatory PIP lots of people who don’t have health insurance wouldn’t have anyone to pay for their health care if they’re in an accident. That means the hospitals would get stuck with the bill.

They pushed for the system to be restored.

The bill (HB 13C) passed overwhelmingly on Oct. 5 says that by Jan. 1, 2008, everyone must once again have PIP coverage.

But most people still have it anyway, because most drivers haven’t renewed their car insurance since Oct. 1 when it became no longer mandatory. If their policy doesn’t come up for renewal, then they won’t have to do anything – they can simply keep PIP. Or they could drop the coverage for a couple months if they want.

Where things change is in lawsuit immunity. People without PIP don’t have immunity from lawsuits. So the new law has to spell out how to handle the fact that some people will have PIP coverage and some won’t for the next few months.

The bill, which is expected to be signed by Gov. Charlie Crist, says that if all the drivers in a crash have PIP, the no-fault system applies and everyone’s PIP coverage kicks in.

If any driver doesn’t have PIP, then everyone is potentially subject to being sued over fault.

“The wise choice is, obviously, to have the voluntary PIP,” said Sen. Bill Posey, R-Rockledge, the Senate sponsor of the bill to restore the requirement.

One group that will notice a difference from the bill’s passage is some customers of State Farm who have renewed their coverage recently. That’s because State Farm lowered some bills in anticipation of PIP’s expiration. Now that it is coming back, those people will see their rates go back up.

The House sponsor, Rep. Ellyn Bogdanoff, R-Fort Lauderdale suggested that drivers should call their agent to talk about how to best protect themselves until Jan. 1.

And, of course, if drivers don’t have a wreck then it’s not an issue.

The House would have liked to have gone further than the bill that eventually passed. Several House members wanted to cap the fees lawyers can charge when drivers have a dispute with their insurance company over whether a PIP claim gets covered. The Senate insisted against that, and it didn’t end up in the bill.

“I think it takes us 60 to 70 percent of the way there,” Bogdanoff said, adding that the bill should dramatically cut down on fraud and might reduce lawsuits as well because with less fraud there may be less claims denied.

Lawmakers could take up the issue again in the spring, but Bogdanoff said she thought it would be better to wait to give the current bill time to work. “I think everybody’s pipped out,” she said.