After 3-month blip, drivers get back PIP

The auto coverage requirement returns Jan. 1.

By TOM ZUCCO, Times Staff Writer
Published December 28, 2007

The sunset lasted three months. But most people never noticed.

On Oct. 1, after 36 years of no-fault auto insurance, the Florida Legislature allowed auto insurance mandates to expire. Yet, after a week's worth of political and special-interest wrangling, lawmakers returned to Tallahassee, added a few tweaks and re-established laws requiring all drivers to carry no-fault insurance.

So starting Tuesday - Jan. 1 - all of Florida's nearly 18-million drivers will again have to carry a minimum of $10,000 worth of personal injury protection PIP insurance. PIP covers injuries and lost wages no matter who causes an accident.

The Legislature delayed implementing the new PIP requirement to the first of the year because insurers needed time to retool their computers and regulators had to process new rate forms and filings.

Motorists who dropped their PIP coverage have until Jan. 1 to restore it, or face suspension of their license and registration.

The stakes in this battle had been high. Hospitals argued they'd be stuck with unpaid emergency room bills if the $10,000 coverage went away. Some of the bigger auto insurance companies weren't happy either, claiming there's rampant abuse of the system, and that most people's medical bills are covered byprivate health insurance, Medicare or Medicaid.

The new PIP law doesn't include limits on what types of fees attorneys can charge for taking on PIP cases. But it does include limits on prices some medical facilities and doctors can charge insurers for non-emergency care. It also requires that PIP clinics be owned or overseen by licensed doctors.

Another key change is the addition of $2-million to the state budget to hire more antifraud prosecutors.

The Florida Insurance Council, the state's main insurance trade association, believes only a few hundred thousand motorists removed their PIP coverage while they had the chance.

"Regardless of how an insurance company stood on the old PIP, the new PIP has increased fraud measures," said Gary Landry, FIC's vice president. "What is returning will be a better PIP than what we had in years past."

Not necessarily, say other trade groups and State Farm, Florida's largest auto insurer.

"Our biggest gripe is that PIP is a mandatory coverage whether you want it or not," said State Farm spokesman Chris Neal. "It's not health insurance." And Neal said subtle abuse of the system remains a big worry.

"The real problem is over-treatment of minor injuries to hit the $10,000 limit," Neal said.

Neal said State Farm, which saw about 40 percent of its nearly 3-million customers make policy changes during the time PIP was not required, will not alter its rates.

It is unclear, Landry said, whether more lawsuits occurred during PIP's hiatus. Also uncertain is how much hospitals had to pay out to cover costs that would have been paid by PIP.

But consumer advocates believe the new law is improved.

"The alternative to not requiring PIP coverage was grim because of lawsuits and the impact on hospitals and the health care system," said Bill Newton, executive director of the Florida Consumer Action Network.

"I'm most excited with more money going for PIP fraud. It's a complicated economic crime. That's why we need more investigators and special prosecutors," he said.

"The people who want to cheat the system have to watch out now."

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.


If you have questions, contact your insurance agent or call the Department of Financial Services' toll-free number: 1-877-693-5236. 

Basic provisions

- Starting Tuesday, Florida law requires drivers to maintain personal injury protection coverage, which pays covered medical expenses for injuries in a crash by the policyholder, passengers and relatives in the policyholder's household.

- If a policyholder fails to maintain coverage, the state may suspend his license and registration.

- If a policyholder already has coverage, it will be amended Jan. 1 to incorporate legal changes without any additional premium. The policyholder doesn't need to take further action.