Efforts to put the brakes on Florida's no-fault auto insurance system are moving in the House and Senate.
But with a little more than three weeks remaining in the 60-day legislative session, and critics claiming the change would be a boon to trial lawyers and kill small-business jobs, the proposal is just starting to advance in the Senate.
Also, the bills differ on a redesign of minimum insurance coverage, with the House sponsor saying the Senate version may just be "PIP renamed."
Thursday morning, the Senate Banking and Insurance Committee voted 8-1 to support a measure (SB 1766) that would eliminate the no-fault system and the requirement that motorists carry personal-injury protection —- commonly referred to as PIP —- coverage. The bill would require motorists to buy bodily-injury coverage, which most drivers in Florida already have.
A short time later Thursday, the House Commerce Committee voted 22-5 to back a repeal measure (HB 1063) that would impose a different minimum of bodily-injury coverage. That bill is now ready to go to the full House.
Under the decades-old no-fault system, motorists are required to carry $10,000 in personal-injury protection coverage. That coverage, which essentially hasn't changed since 1979, is designed to pay medical bills after accidents.
"I'm of the fundamental belief that PIP is woefully inadequate in the 21st Century," Senate bill sponsor Tom Lee, R-Thonotosassa, said. "It's just lost pace with the cost and medical inflation and treating injured parties."
The House legislation is projected to save motorists an average of about $81 a year per policy. But that is mostly due to the fact that nearly 90 percent of motorists already have some form of bodily-injury coverage, and the savings would depend on where motorists live.
The change could affect health-care premiums, according to a House staff report.
The Senate proposal, which would require more overall coverage and gradually impose a higher minimum of bodily-injury coverage, is projected at providing $9 to $12 a year savings, depending on where motorists live.
Under Lee's proposal, starting in 2018, motorists would be required to have $20,000 in personal bodily-injury coverage and $40,000 for multi-person bodily-injury coverage. The minimums would grow two years later to $25,000 and $50,000 and to $30,000 and $60,000 in 2022.
Motorists would also be required to have $5,000 in medical-payments coverage, similar to a component in no-fault.
Sen. Rene Garcia, R-Hialeah, cast the lone vote against the Senate measure, due in part to his desire for the bill to include a $2,500 set-aside for physician emergency-room care.
“That's extremely important for me,” Garcia said. “I also have a concern that this is a cost shift from auto-insurance to health-insurance policies, and it does nothing to ensure that rates will go down for those that need it the most.”
The House bill, sponsored by Rep. Erin Grall, R-Vero Beach, would take effect Jan. 1. It would mandate motorists get at least $25,000 in coverage for bodily injury or death and $50,000 for bodily injury or death of two or more people.
Medical payments coverage is not included in the House proposal, and Grall doesn't support its inclusion.
“I'm concerned that if we just rename PIP 'med pay,' we will have the same problem,” Grall said.
The proposals to change the auto-insurance system come as lawmakers continue to express dissatisfaction with a 2012 effort to reform the no-fault law. That effort was championed by Gov. Rick Scott and state Chief Financial Officer Jeff Atwater.
The 2012 law, which set benchmarks for insurers to lower rates, was considered a last-ditch effort to maintain the system after rates increased due to an increase in fraudulent claims.
The law, in part, required people involved in crashes to seek treatment within 14 days and allowed up to $10,000 in benefits for emergency medical conditions, while putting a $2,500 cap on non-emergency conditions.
A state-commissioned study in September by Illinois-based Pinnacle Actuarial Resources determined the 2012 reform law resulted in an estimated statewide average savings in PIP premiums of 15.1 percent.
However, the Office of Insurance Regulation reported that while rates dropped for the first two years, they have grown since 2015 by 25.7 percent– driven by increases in medical care, costs of vehicle body work and distracted drivers.