Politics

Goodbye PIP, hello confusion

Florida's no-fault insurance system dies Monday. But might come back. Or not. Nobody knows.

By JENNIFER LIBERTO and HELEN HUNTLEY, Times Staff Writer
Published September 29, 2007

TALLAHASSEE - If the demise of Florida's no-fault insurance system has you confused, you aren't alone.

Mandatory personal injury protection is set to go away Monday morning, and nobody knows for sure how long those laws will remain off the books.

While lawmakers are scheduled to return to Tallahassee for a special session next week, they will not take up a negotiated deal to extend PIP. That means starting Oct. 1, Florida law will require drivers to carry only property damage auto insurance.

Reached Friday evening, Gov. Charlie Crist said that he plans to review a request he received Friday from House Speaker Marco Rubio, asking him to call a separate special session on auto insurance.

"I would not rule it out," Crist said.

While the only drivers immediately affected by the pocketbook decision to drop PIP coverage are those whose policies are renewed starting Oct. 1, anyone who gets into an accident while no-fault is off the books could feel the effect of PIP's demise. Drivers who cause crashes could be more likely to get sued.

Consumer experts say the only drivers guaranteed to save money as a result of PIP's disappearance are those who drop their injury insurance and never have an accident. Drivers may or may not need replacement coverage, which could end up costing more. Figuring it all out is complicated.

"It's a mess," said Scott Johnson, executive vice president of the Florida Insurance Agents Association. "There isn't any clear direction from the Legislature as far as what a company or agent should do."

Insurers have had to leave PIP coverage in place for customers who renewed before Oct. 1. Yet, many drivers renewing policies after Oct. 1 have already gotten notices giving them the option of dropping PIP. In addition, any driver can call his insurer and cancel PIP coverage as soon as Oct. 1 rolls around.

PIP covers up to $10,000 per person in medical costs regardless of fault in an accident. In a no-fault system, drivers can't be sued unless they seriously injure someone. Even if a driver is sued, the claim cannot include expenses paid through PIP.

Come Monday morning, the no-fault system disappears, and even small accidents may lead to a policy claim or a lawsuit for at-fault drivers.

"Everybody is going to be able to seek recourse from the at-fault party from dollar one for any medical bills," said Cynthia Webster, vice president of Jack Rise Insurance in Largo.

Making sure drivers are adequately protected if PIP disappears permanently means understanding not only car insurance, but also health insurance and any umbrella liability policies. That's why drivers should confer with their agents. Not only are the coverage details complicated, but premiums vary depending on the insurer, location, accident history and even credit rating.

In addition to PIP, drivers may carry other coverages that would pay for accident injuries like medical payments, bodily injury and uninsured motorist protection. Drivers carrying those coverages may not need to make any policy changes in a post-PIP world.

However, premiums could still go up thanks to PIP's demise.

Bill Hoelzle of Dunedin was shocked when he got a recent renewal notice. Although his $161 PIP premium was eliminated, his premiums for bodily injury and uninsured motorist went up a combined $157 with no increase in coverage.

"Looks like the policyholder has gotten the dirty end of the stick once again," he said.

Medical payments coverage, or "med pay," most resembles PIP since it covers drivers and their passengers regardless of fault. Drivers with good medical insurance probably don't need med pay to pay for injuries they sustain. But one in five Floridians has no medical insurance, so if you ever drive a car pool or carry other passengers, you might want the coverage to protect them.

One of the biggest concerns regarding the demise of PIP is the expected increase in uninsured motorists.

Before Florida began aggressive enforcement of the requirement to carry PIP, nearly a third of the state's drivers were uninsured. Starting Monday, drivers will no longer be required to show proof of insurance when stopped by a law enforcement officer for a moving violation. Drivers will have to show proof of insurance only when they register their car or crash their car, said Dave Westberry, deputy executive director of Department of Highway Safety and Motor Vehicles.

"The cost that insurance pays for today is going to get shifted to the hospitals, because they'll still be treating people and not getting paid for it, and to the health insurance companies," said Dan Tarantin, chief executive of Direct General Corp., which does business in Florida as Florida No Fault Insurance and Cash Register Insurance.

On Friday, legislative leaders said they would only focus on budget cutting during the special session starting Wednesday, despite the work of PIP negotiators who had hammered out an agreement a week earlier.

Nevertheless, early next week, insurance committees in both chambers are expected to continue work on proposed legislation that would extend PIP.

Times Staff Writer Steve Bousquet contributed to this report.

Fast facts

Insurance checklist

1. Determine your regular renewal date.

2. If your renewal date is soon, contact your insurance agent to discuss coverage options.

3. If you choose to drop personal injury coverage, make sure your medical insurance covers you and your passengers.

4. Please drive carefully.

[Last modified September 28, 2007, 22:48:57]