A move to end the state’s decades-old no-fault auto insurance system started again Wednesday in the Senate, after Gov. Ron DeSantis vetoed the effort last year.
The Senate Banking and Insurance Committee approved a proposal (SB 150) that would eliminate a requirement that motorists carry personal-injury protection, or PIP, coverage and require them to have bodily injury coverage.
Bill sponsor Danny Burgess, R-Zephyrhills, said the proposal, which is slightly altered from the 2021 version, would bring costs down across the auto insurance industry.
“This product is going to reduce rates,” Burgess said after the meeting. “It’s just obviously a big, scary topic. And we (have) just got to get everybody to wrap their arms around it and realize it’s a process. There’s still some ways to go.”
But industry groups that oppose the change contend it could result in rates leaping as much as 77 percent for some motorists. Sen. Jeff Brandes, R-St. Petersburg, said he couldn’t support a proposal that might increase the number of uninsured motorists on Florida roads without an updated study about its projected impacts.
“This is essentially, in my opinion, legislative malpractice that we are going to talk about a piece of legislation that affects the lives of millions and millions of Floridians and we have not, over the summer, got an actual study that says, based on the actuaries and based on the counsel that we’ve received, this is going to reduce rates by x,” Brandes said.
Under no-fault, motorists are required to carry $10,000 in PIP coverage, an amount unchanged since 1979. The coverage is designed to help defray medical costs after accidents.
As with a similar House bill (HB 1525), the Senate proposal would require motorists to have at least $25,000 in coverage for bodily injury or death and $50,000 for bodily injury or death of two or more people.
Insurers would also have to offer medical payments coverage, known as “med-pay,” at $5,000 and $10,000.
The 2021 proposal would have required people buying auto insurance to “opt out” of med-pay. Burgess’ proposal would allow motorists to “opt in” to the coverage.
The House bill, which has not been heard in committees, would also offer a $5,000 death benefit, which isn’t in the Senate bill.
The Senate proposal includes addressing third-party bad faith cases, which has been a sticking point in past PIP repeal efforts. Insurers have sought changes in the state’s bad-faith laws, which deal with situations in which insurers are accused of not properly handling claims.
For several years, lawmakers in both chambers floated the idea of ending the no-fault system, before sending a bill to DeSantis’ desk last year.
The governor’s office didn’t immediately respond Wednesday to a request about DeSantis’ stance on the current proposals.
Burgess said there have been “continuing conversations” with the governor’s office.
In vetoing the bill last year, DeSantis said the no-fault system has flaws and that state law involving bad-faith litigation is “deficient.” But DeSantis added that the proposal didn’t “adequately address the current issues facing Florida drivers and may have unintended consequences that would negatively impact both the market and consumers.”
An analysis by Pinnacle Actuarial Resources, released while the bill was on DeSantis’ desk, said repealing PIP would result in an overall increase in premiums of 13.3 percent for all coverages combined, or $202 a year for the average vehicle.
But Burgess said repealing no-fault would eliminate thousands of “assignment of benefits” lawsuits tied to no-fault. He also contended the Pinnacle report made assumptions that “it shouldn’t have” that all motorists would opt for $10,000 in med-pay coverage.
Burgess also said the Legislature can’t stand idly by as rates increase. Bill supporters say a 2012 overhaul of the no-fault system failed to lower rates and reduce fraud.
“Right now, we’re on an escalator, and we aren’t doing anything about it,” Burgess said, addressing Brandes. “Our rates are still going up though.”
The American Property Casualty Insurance Association contends both proposals would likely result in increased insurance costs, particularly for the approximately 40 percent of drivers who have minimum coverage. It said the proposals could increase costs from 48 percent to 77 percent.