Are we sure we don't need no-fault?

Published May 17, 2007

Let's say you and I are driving down the street when some yo-yo runs a stop sign and hits us. Nothing bad, but we have to get X-rays and a few stitches at the hospital.

"Even this is gonna cost a fortune, " you say. "Do I have to sue the guy who hit us to get the hospital bill paid?"

Nope. Your own auto insurance pays for it, up to $10, 000, under coverage called "Personal Injury Protection." We all have it. It's required.

Same deal if you or I turn out to be the dummy who hits and hurts somebody else. They have it for themselves.

So it doesn't matter who hits whom. It's called "no-fault" insurance. We've had it in Florida since the 1970s.

But it's changing. The "no-fault" law will expire on Oct. 1.

For most of us, this won't matter too much. We'll have other kinds of coverage.

But for some, and therefore for society at large, it matters a lot. Better pay attention and check your coverage.

                                                                                          * * *

According to critics - led by State Farm - there are too many problems with no-fault. (Not all insurers agree, but State Farm is the big kahuna.)

First, no-fault doesn't get rid of lawsuits. People sue each other anyway. Sometimes that first $10, 000 is just "seed money" to start building the case for a bigger claim.

Second, everybody plays pretty loose with the Insurance Company's Money. With a $10, 000 limit, the typical claim is close to ... uh, $10, 000.

"Fraud" is an ugly word. Let's just say the system lacks incentives or many rules for limiting costs.

You might ask: Why throw out the baby with the bath? Why not crack down on lawsuits and costs? But it is easier said than done - the Legislature can't agree on how.

State Farm is ready to go. The company has already filed a 16 percent rate cut with regulators, and is renewing policies without the old coverage.

                                                                                          * * *

If you have other coverage in your car policy, maybe you don't care. State Farm says 83 percent of its customers do.

There's also other kinds of coverage, Medicare, Medicaid, workers' comp, and so forth.

But some people don't have any of that. This worries the main supporter of keeping no-fault, the Florida Hospital Association.

The hospitals point out that 20 percent of Floridians under 65 have no health insurance. They claim this could cost them up to $350-million a year to treat accident victims. The insurance guys say that's way pessimistic.

So the question is whether our lawmakers, who are coming back for a special session on property taxes in June, should revisit the no-fault question. Some folks want Gov. Charlie Crist to make 'em.

I figure they oughta try again and make an affirmative decision, instead of backing into one. Maybe there's still time to put good changes in place. If not, maybe they could come up with a transition plan, a warning, a requirement for other coverage - something other than just flipping the switch on Oct. 1.

Otherwise, some Floridians are going to be in for an unpleasant surprise.

                                                                                          * * *

At the risk of shameless and undignified self-promotion, I invite you to join me online at TroxBlog for bonus daily commentaries, lots of reader opinions and weekly live chats. Go to www.tampabay.com and click on the "Blogs" link, or type in the direct address blogs.tampabay.com/troxler.