TALLAHASSEE — We couldn’t set the holiday table for an early Florida legislative session without a heaping helping of interest-group squabbling. And one of the most cash-fueled battles to christen the New Year will be over your auto insurance.
Florida’s personal-injury protection (PIP) auto-insurance law is under assault from Florida Chief Financial Officer Jeff Atwater, Gov. Rick Scott and lawmakers who argue the state’s unique no-fault insurance environment is plagued by staged accidents and overbilling, sticking drivers with a $910 million “fraud tax” built into their premiums.
Underlying this fight, of course, are political interests aplenty.
Critics are arguing that the movement is really being driven by insurance companies. Doctors, chiropractors, attorney-referral services and a host of other medical-related professions all joined forces with trial lawyers to kill PIP changes last session.
Insurers are huge contributors to the GOP political establishment that runs Tallahassee. Doctors and other medical providers are big givers, too. And trial lawyers are one of the Florida GOP’s last still-standing political foes.
“A lot of people are making a lot of money off PIP,” said Rep. Mike Horner, a Kissimmee Republican who tried to push a PIP overhaul last spring. “Given the interests involved, I’ve reached the conclusion PIP is likely beyond saving.”
But unlike a lot of Capitol fights, this is one with profound implications for your wallet.
Atwater’s office has produced a report that suggested the number of drivers in Florida has held steady, the accident rate has decreased from 1.76 per 100 licensed drivers in 2005 to 1.52 last year, but insurance costs have skyrocketed.
Direct losses have climbed from just more than $1.6 billion in 2005 to $2.3 billion last year. Losses have gone from $2 billion to $2.7 billion.
Insurers, consumer groups and trial lawyers are already sparring over whether to eliminate the $10,000 in required PIP coverage — or place new limits on the types of services covered and where lawsuits could be filed.
One measure pushed by Rep. Rich Workman, R-Melbourne, goes after insurance fraud with additional resources for prosecuting cases. Supporters of the status quo like it a lot.
The option favored by insurers is being carried by Rep. Jim Boyd, a Bradenton Republican and insurance agent. It would limit attorney fees, put utilization limits on doctors and allow health-care providers to be examined under oath in order to get paid, among other industry-friendly changes.
“This is a huge problem that is costing Floridians a lot of money, and we have a chance to fix it,” Boyd said.
Of course, the alliance of medical and legal practitioners doesn’t like that option much. “It is not an anti-fraud bill, but is actually the insurance company’s wish list,” said Paul Jess, general counsel with the Florida Justice Association.
Then there is Horner’s solution: blowing up PIP.
After watching the interest groups climbing over one another to weigh in on last spring’s effort, Horner is proposing to replace Florida’s no-fault legal environment with a liability system. The bill he’s drafting would mandate drivers buy $25,000 in bodily injury liability coverage and $10,000 in emergency medical payment coverage for hospitals.
That would bring Florida into line with most other states, and probably lead to significant reductions in premiums — maybe hundreds of dollars a year for the average family.
And it would peel off the trial lawyers — who support moving to a liability system — from the anti-PIP reform alliance.
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