Florida’s top regulator proposed a bracing idea to deal with the state’s fraud-prone Personal Injury Protection car insurance system Wednesday.
Kill it after more than 40 years.
Replace it with nothing.
“What do you do?” Insurance Commissioner Kevin McCarty said. “Here’s an idea. I’m just throwing it out there for discussion. Let’s just repeal PIP and do nothing.”
McCarty, speaking on the closing day of the Florida Chamber of Commerce Insurance Summit in Orlando, cited the example of New Hampshire. He mentioned the state’s “live free or die” motto. He noted the state did not require a coverage like PIP or an alternative requirement some states have, bodily-injury liability.
New Hampshire’s Division of Motor Vehicles acknowledges the state has no mandatory insurance law but “strongly recommends and urges all owners of motor vehicles to carry standard liability and property damage insurance.” Drivers retain financial responsibility for harm they cause.
Ending Florida’s requirement would cut off the flow of money feeding PIP fraud and state officials could review coverage requirements after a couple of years, McCarty said.
Created in the 1970s, Florida’s no-fault system provides $10,000 coverage for minor injuries regardless of who is at fault in an accident. But the program, designed to get payments out quickly and avoid lawsuits, has been dogged by continuing fraud, high premiums and its own mountains of litigation.
For years, calls to dump PIP have proved unable to break through a lobbying phalanx of hospitals, insurers and other interests in Tallahassee. There have been few signs heading into the legislative session that 2016 will be any different.
In past years, some bills would have allowed drivers to opt of PIP if they can prove they have health insurance. Others would have the state drop PIP and require bodily-injury liability coverage instead.
Gov. Rick Scott has argued for keeping PIP and giving 2012 reforms a chance to work.
“If there are any proposals that come up during the legislative session, our office will review it,” a spokesman for the governor said.
There was no immediate comment from the Personal Insurance Federation of Florida, representing big insurers.
A group representing hospitals provided a statement to The Palm Beach Post.
“Florida has a very large uninsured population,” the Florida Hospital Association said. “For many who need emergency care following a car accident, PIP is their only coverage. If Florida did away with making those involved in auto mishaps responsible for their own and other’s injuries, then our state would increase the uninsured population and the cost shift to those who carry insurance. We welcome Commissioner McCarty’s ideas on how to address Florida’s high number of uninsured people.”
Florida is among of handful of states to keep a no-fault system. Colorado drivers saved 35 percent on their overall premiums after dropping a no-fault program, The Palm Beach Post has reported.
A state report in January showed Florida drivers have seen virtually zero savings on their overall car insurance bills since 2012 reforms, though car insurers saved billions on reduced PIP claims. As a group, insurers failed to meet targeted consumer savings of 25 percent on PIP premiums but suffered no ill effects under the law for doing so.
Florida’s required minimum coverage to maintain a license plate is $10,000 personal injury protection and $10,000 property damage liability, according to a state website.