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Don't drop car insurance yet
State officials say PIP's demise doesn't spell the end of all coverages.
By JENNIFER LIBERTO, Times Staff Writer
Published August 23, 2007
TALLAHASSEE - Florida drivers, if you thought you would be able to drop all your auto insurance starting Oct. 1, think again.
After months of warning that the sunset of Florida's no-fault law would leave the state without any auto insurance requirements, the state highway agency has reversed course.
Florida drivers will still have to carry property damage coverage, the agency says now, even if the Florida Legislature allows the no-fault insurance law to expire.
Unless the Florida Legislature acts, starting Oct. 1, drivers will no longer be required to purchase $10,000 worth of personal injury protection, or PIP, which covers injuries in accidents no matter who is at fault.
The Department of Highway Safety and Motor Vehicles had said that the demise of the state's no-fault laws would also wipe out the state's only other kind of mandatory auto insurance coverage: property damage liability.
The surprise reversal was revealed in a legal opinion released Tuesday.
What is still unclear is whether the state will be able to enforce such coverage in the same way it now enforces personal injury protection, said agency spokeswoman Ann Nucatola.
Right now, if a driver drops his PIP coverage, state law requires his insurance company to notify the state agency of the cancellation. That way, Highway Safety can go after uninsured drivers. The same enforcement standards may not apply to those who decide to drop their property damage liability coverage; the agency is still looking into it.
"If we don't have enforcement, there would be nothing from stopping someone from going to register their car, showing their insurance, and then dropping it the next day," Nucatola said.
Some enforcement
Some enforcement would still exist. If a driver gets in an accident, for example, the driver would be required to produce proof of property damage coverage or face a second-degree misdemeanor, a maximum $500 fine and 60 days jail time.
The strong enforcement requirements come from a 1988 Motor Vehicle Insurance Reform Act, enacted at a time when 31 percent of Florida drivers were uninsured, according to a Senate report on the no-fault system. The rate of uninsured drivers has since dropped to a low of 4 percent in 2005.
Without such enforcement, critics say that the property damage liability coverage will be ignored.
"If nobody is enforcing it, the property damage law will be moot," said Scott Johnson, executive vice president of the Florida Association of Insurance Agents, which wants the no-fault law revised and extended.
Legislators have not worried about the laws requiring property damage liability coverage the way they have worried about personal injury protection. With PIP, there's more money at stake and more opportunities for fraud, since insurers have to pay no matter who caused the wreck.
But fixing the no-fault system has proven difficult. The Legislature has made attempts each year since 2004, the year the sunset was approved, but every effort has failed in a crossfire of competing special interests.
The latest effort is a House proposal that would preserve mandatory personal injury protection, but with controversial changes that make it unlikely to pass in the Senate.
Several senators, including the chairman of the insurance committee, Bill Posey, R-Rockledge, said the House bill "may just go a bit farther than where the Senate needs to go."
'Life and death'
The proposal would retain the basic no-fault system with a $10,000 injury benefit, although it limits nonemergency care to $5,000. It caps attorneys' fees, requires PIP clinics to be owned by doctors and gets rid of 20 percent co-payments that now exist for policyholders, so the insurer pays everything.
Hospital and doctor groups released statements supporting the proposal on Wednesday; trial lawyers and some auto insurers said they would oppose it.
Senate Minority Leader Steve Geller, D-Cooper City, called the House plan an ultimatum that the Senate wouldn't stand for. He also said he thought the Legislature should not tackle auto insurance during the special session and instead wait for the next regular session.
"There are literally life and death decisions we have to make during the special session, and I just don't think we're going to mess that up with a discussion on PIP," Geller said.
Times staff writer Tom Zucco contributed to this report. Jennifer Liberto can be reached at jliberto@sptimes.com or 850224-7263.
Fast Facts:
What's next
House Democrats have said they will file a bill to extend PIP another year at the special session on the state budget scheduled to start Sept. 18. However, if auto insurance is excluded from the official agenda, two-thirds of both chambers would have to agree to take up the issue. It rarely happens.
[Last modified August 22, 2007, 23:18:44]
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Comments on this article
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by Jim
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10/03/07 10:26 AM
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John was right. "Why should I pay for health insurance twice?" PIP should only be required if you don't have Health Insurance.
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by stuart
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09/25/07 06:31 PM
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Follow the motorcyle law must have at least ten thousand worth of medical ins.
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by RP
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09/15/07 10:22 PM
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These insurance agents are here shaking in their boots..who needs your fraudulent policies that make every excuse not to pay when it's claim time, PIP is a rip off and it must go!
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by pamela
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09/14/07 01:13 PM
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Wow, now if only they would stop rating us based on our credit and rate us on our driving, we woould see a substantial savings. i think insurance should be necessary to protect all others on the road. drivers without insurance are selfish.
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by kiki
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09/10/07 01:49 PM
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free at last..i can't wait for October 1st. car insurances are people's choice
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by Rita
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08/27/07 12:10 PM
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As a Senior Citizen covered by an HMO an don't need coverage for lost wages. I carry uninsured motorist coverage. I think Seniors with Health Ins. should be excluded from PIP>
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by BECKY
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08/24/07 12:46 PM
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THE GUY WHO SAID HE DIDN'T HAVE TO PROVIDE INSURANCE (WRONG) I WORK IN TAX COLLECTOR OFFICE OUR COMPUTER WON'T PROCEDE UNTIL WE ENTER INSURANCE INFO UNLESS HE HAS TRAILER OR MOTORCYCLE. THAT IS THE ONLY VEHICLE NOT REQUIRED TO PROVIDE INSURANCE.
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by Roberto
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08/24/07 12:24 PM
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So why should we pay for insurance? It seems that anytime an insurance company has to actually payout on claims they add an exclusion for it in the policy or try to get rid of the law controlling it.
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by violet
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08/23/07 11:34 PM
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i imagine some people would think it would be great. We are being led like lambs to slaughter. we may save a few dollars but at what cost. We already have too many people driving uninsured or underinsured in this state. SPEAK UP FLORIDIANS NOW!!!!!!!
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by armando
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08/23/07 11:08 PM
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The insurance lobby and their legislators screwing the consumer. Is it not enough with windstorm. Come on guys leave the thing alone, I pay $107.00 per year for this coverage.
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by Kurt
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08/23/07 07:58 PM
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Gosh, we live in a dangerous world. I now see that there is no real coverage, only premiums. Back to walking.
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by Andy
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08/23/07 06:54 PM
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If PIP goes away you can bet the tax payers will have to make up the differance. The automobile insurance companies have record profits each year just like big oil. If you want to talk about Fraud take a look at the Speaker of the House Rubio.
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by Claim Adjuster
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08/23/07 04:45 PM
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Tom, I need to make a full disclosure here unlike Liberto and Zucco, who know nothing about insurance, statutes, and true issues of PIP. Med Pay does not cover lost wages or essential services, i.e. household tasks, but the trade off is good overall.
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by Dave
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08/23/07 04:39 PM
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One more reason the rest of the country thinks Florida is backwards.
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by Claim Adjuster
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08/23/07 04:35 PM
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Tom, there is nothing up with the 25K Med Pay in exchange for the 10K PIP that only pays 80% to begin with, simply the coverage is not Statutory therefore, the Legislature can't mess it up, it is contractual coverage written by the insurance co.
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by Claim Adjuster
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08/23/07 04:33 PM
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PIP needs to go, the fraud is ridiculous and supported by the court system. Med Pay coverage can be purchased to cover medical expenses, the trade off Med Pay for PIP is a good one. Take the lawyers and courts out of the equation and we all save!
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by John
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08/23/07 03:59 PM
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One more reason why universal, single-payer national health care is needed. Eliminate health insurance & PIP altogether and take profit out of the equation. Can't have fraud if there's no money to be made! Prop Dmg liability stays mandatory.
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by john
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08/23/07 03:43 PM
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Why don't we just ask Gary?
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by John
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08/23/07 03:36 PM
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Get rid of PIP. Most states do not have a system like that and have much lower insurance premium. Around 43 states says it should not be mandatory. FL should follow suit. Why should I have to buy health insurance twice?
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by Rick
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08/23/07 02:41 PM
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PIP is a money loser. That's why Big Insurance wants it to go. But, by letting PIP expire with no transition plan to tort in place, the legislature is endangering the financial health of FL's citizens. Extend PIP for 1 yr and FIND A REAL SOLUTION
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by brt
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08/23/07 02:27 PM
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interesting - i just moved here and when i registered my vehs no one asked to see proof of ins. as other states have found, mandatroy ins is virtually unenforceable business. within the industry, there's something called "tag business".
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by Doug
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08/23/07 02:21 PM
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As a motorcycle owner I must admit that the PIP was a rather reasuring thing since there is no such thing as a "little" accident when hit on a bike. Most medical plans are really hot to sue to recoup money from an accident you know!!
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by Doug
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08/23/07 02:17 PM
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State Farm promised an average savings of $152/customer if PIP goes away. Well that portion only costs me $44/car now and I will obviously have to buy uninsured motorist and medical coverage to replace it for lots of money. No savings from State Farm
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by Sandie
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08/23/07 02:16 PM
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It's not the ins co making the money, it is the health providers. Ins co's make their money by investments, not losses vs. premiums, so if you want to do the math, look into those #'s. Look at true loss ratio's.
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by Paul
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08/23/07 02:00 PM
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For the small percentage of people that it 'helps', it costs the rest of us millions in larger premiums. I work in insurance and there's not only fraud by the insureds, there's fraud by the chiropractors, clinics and physical therapists.
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by Rosy
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08/23/07 01:36 PM
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People that don't own anything, don't care to have car insurance, and because of those uninsured drivers, the ones with a full coverage policy will end up paying more, eventhough there will be a reduction in premium due to no PIP coverage.No Win..
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by Tom
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08/23/07 12:55 PM
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Comment #3 If you want to know who the players are in my prior two comments...they are UCH hospital health insurance for employees Tampa and State Farm car insurance!
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by Tom
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08/23/07 12:52 PM
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Comment #2 I had my daughter ask her health insurer if it will pay if she got in an auto accident and needed medical help. The response she got was only if the car insurance company sent a letter stating it would NOT pay!
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by Tom
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08/23/07 12:46 PM
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State Farm sent my 27 year old daughter a letter offering her alternative coverage. She can get $25,000 coverage for the same amount that she currently pays for $10,000 worth of of PIP. Now what's up with that?
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by Marc
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08/23/07 11:46 AM
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Crafted by thieves Bill? What insurance company do you work for? PIP is a good system that needs some treaking, like not letting non physicans own clinics. State farm bought political clout and Florida drivers are at serious risk if PIP isnt extended
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by bryan
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08/23/07 11:20 AM
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i am a claims adjuster - take my advise, get as much uninsured motorist coverage as you can afford in florida. if you have no um bi in florida, or minimal limits, you face large out of pocket expenses. protect yourself first!
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by JT
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08/23/07 11:12 AM
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Do away with PIP. I am sick of paying for freeloaders, scam artists, ambulance chasers and quacks. People need to make it a priority to have health ins instead of nascar tickets and cigarettes. No ins./license go to jail for one year minimum. Solved.
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by Linda
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08/23/07 11:10 AM
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Have you ever heard the expression "don't throw the baby out with the bath water"? That's what our esteemed legislators are doing. PIP serves a definite purpose, and people who have no health insurance are going to be severly hurt by its demise!
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by RICHARD
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08/23/07 10:54 AM
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WHY DOES ANYONE NEED INSURANCE IN THIS STATE? DRIVERS WITHOUT INSURANCE GET AWAY AWAY SCOT FREE ANYWAY.PERONAL EXPERIENCE.
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by chen
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08/23/07 10:37 AM
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Keep PIP, I'm tired of hearing this arguement,it ain't broke, leave it alone!
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