Watch Out for More Auto Insurance Changes to Come

Earlier this year, the Florida  legislature passed Personal Injury Protection (PIP) “reform” that severely limited the extent of coverage provided by insurance companies under PIP. The reform promised to lower PIP premiums; that result has been lukewarm in saving consumers any money.

Now some legislators and other state officials would like to eliminate PIP coverage and the entire “no fault” system that has been in place in Florida for 41 years. PIP coverage pays for medical bills and lost wages after an automobile accident. An injured person gets those paid without having to file a lawsuit or determine who is to blame in the accident.

Head On Collision

Florida lawmakers think it is a good idea to turn back the clock to when you would not get your medical bills paid or get any lost wages compensated after an automobile accident unless you file a lawsuit and win.

These are the same Florida lawmakers who are fond of digging up old, skewed statistics to support their arguments that there are too many lawsuits. They apparently pick and choose when they want to force Florida consumers to have no recourse, except the filing of a lawsuit.

To put this in insurance company perspective, the industry hates PIP coverage because they are forced to pay regardless of fault and they have legally are limited in the amount of time they can hold on to their money. In addition, the reason most insurers do not want to insure Floridians houses, but will fall all over themselves trying to issue you auto insurance is because automobile bodily injury insurance is a big profit maker for them.

Add to all of this that lawmakers want to introduce this legislation in the midst of a health insurance tumult that makes both health insurance companies and consumers very nervous. If PIP goes away, guess who will inherit the payment of medical costs starting at the first dollar; health insurance companies will be responsible.

So, at a time when health insurance premiums have been rising, Florida lawmakers want to further tax the health insurance system and add additional lawsuits to the court system.

What do the insurance lobbyists want if PIP is done away with?  They want “to include some legal reform in the auto insurance reform package – that’s a big, big thing to the industry, said insurance company lobbyist Sam Miller. That means the law will be anti-consumer and the insurance industry will be asking to make it even harder to take them to court.

Then there is the solution proposed by Senate Banking and Insurance Chairman David Simmons when he raised the idea of doing away with PIP and the no fault system. Mr. Simmons wants to require every Floridian with a car to carry a mandatory $25,000 per person or $50,000 per accident in insurance coverage. In plain language, Mr. Simmons wants to do away with payment of medical bills and lost wages unless a consumer files a lawsuit and wins AND he wants all consumers to pay higher premiums for higher mandatory coverage limits.

It would seem that all the lawmakers so far can propose are solutions that punish the consumer, but allow the insurance industry to win, win, win.