Florida Gov. Rick Scott, Chief Financial Officer Jeff Atwater and Insurance Commissioner Kevin McCarty, among other leaders, held a Jan. 25 rally at the State Capitol in Tallahassee to drum up support for efforts to overhaul Florida’s so-called “no fault” auto insurance system.
Scott has outlined an approach he calls the “four pillars” of reform, which include fraud prevention, litigation reform, utilization and provider reform, and accountability. Enacted in 1973, Florida’s no fault system requires all drivers maintain at least $10,000 of personal injury protection coverage.
“This is how laws get changed,” Scott said to a crowd. “You show up and let lawmakers know what you want. Tell them we want this change this year.”
The rally came as a bill that would replace the state’s PIP system with a new form of accident insurance called “emergency care coverage” cleared its second legislative hurdle, passing the House Civil Justice Subcommittee by an 11-4 vote. The measure, H.B. 119 , previously passed the House Insurance and Banking Subcommittee and moves next to the Economic Affairs Committee.
Sponsored by state Rep. Jim Boyd, R-Bradenton, the bill would require victims of auto accidents to report to a hospital emergency room within 72 hours to be eligible for emergency care coverage benefits. The bill also would cap attorneys fees, establish a medical fee schedule, proscribe medical tests deemed not medically necessary, require more detailed accident reports, grant insurers more time to investigate suspected fraud and give greater latitude to question claimants under oath.
Boyd’s bill has support from the insurance industry, with some trades calling for a complete repeal of Florida’s no fault system. Ray Farmer, Southeast region vice president for the American Insurance Association, said in a statement that his group “supports the repeal of Florida’s broken PIP system. We commend members of the subcommittee for taking action which maintains emergency care coverage but will deter fraudulent claims.”
According to the Property Casualty Insurers Association of America, Florida leads the nation in staged accidents, with Tampa, Miami, Orlando and Hialeah all ranking among the top 10 cities for questionable auto claims. Though the number of claims has fallen over the past five years, claims costs have risen more than 50% over the same period. PCI estimates auto insurance fraud has cost Florida consumers $1 billion over the past three years, leaving Florida policyholders to pay premiums that are 56% higher than those in other states.