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Agreement To Save PIP Won't Benefit Consumers
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Published: September 27, 2007
With the encouragement of Gov. Charlie Crist, negotiations to rescue Florida's no-fault automobile insurance law from extinction have been successful, which is not necessarily a good thing for consumers.
Personal injury protection (PIP) - the mandatory $10,000 in medical coverage to pay for auto injuries regardless of who is at fault - will likely survive its Oct. 1 sunset date. Trouble is, the negotiations took place behind close doors and lawmakers have not yet had the chance to scrutinize the plan.
The proposal includes more money to battle fraud and caps coverage amounts. It's a plan beneficial to hospitals, which have complained they could lose as much as $350 million from treating otherwise uninsured or underinsured patients, but it hurts consumers who are already pinched by high car insurance rates.
It's true that for some drivers, the only health insurance they carry is their automobile insurance policy. But most drivers have health insurance, and for them the PIP requirement is an unnecessary cost.
Rather than patching the PIP system, lawmakers and their constituents would be better off coming up with a plan to force drivers to carry a minimal amount of medical payment coverage for themselves and other covered persons.
Sen. J.D. Alexander, for example, is proposing sensible legislation that would mandate drivers to carry 'bodily injury' coverage that would require an at-fault driver to pay for medical damages.
It may have made sense to adopt no-fault back in 1971, when courts were filled with fender-bender lawsuits brought by ambulance-chasing lawyers and crooked doctors. But the easy-to-get $10,000 payout led to a fraud-plagued system of staged car crashes, falsified accident reports, faked injuries and fraudulent billing. And as a consequence Florida drivers are paying among the highest car insurance premiums in the country.
Lawmakers have had years to fix the system and failed to do it. Just last year the Legislature passed no-fault reform. Gov. Jeb Bush vetoed the law. He said it didn't go far enough because it failed to address a medical fee schedule, attorney's fees or agreed upon treatment protocols.
Key parts of last week's agreement include tightening restrictions on who can own a PIP clinic, capping costs of some medical services for PIP patients and allocating more money to prosecute insurance fraud. It does not cap attorney's fees.
Lawmakers will likely consider PIP's revival in the special session that begins Oct. 3, but don't expect the solutions they have proposed to prevent fraud or to lower your insurance premium.
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