No-fault auto insurance system debate returns to Florida House

No-fault auto insurance system - car crash
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Replacement legislation would remove personal-injury protection in favor of bodily injury coverage.

Once again, Florida’s no-fault auto insurance system has made its way back to the House and faces potential demise. This, despite concerns voiced by the industry suggesting that this move by the Legislature may not reduce premiums.

Critics warn that removing the current system risks increasing health insurance rates and lawsuit numbers.

Earlier this week, the House Insurance & Banking Subcommittee backed HB 771. That measure would replace the current mandatory components of the no-fault auto insurance system requiring persona-injury protection (PIP) coverage. It would replace that requirement with mandatory bodily injury coverage. Backers of this change state that the change will help to reduce the notoriously high Florida insurance premiums.

The same House Proposal also included the requirement that car insurers would offer medical payments coverage, called MedPay. This is not a new position but is one the state Senate has previously supported. The idea behind that type of coverage is to cover medical bills when motorists are injured in crashes.

The core PIP component of the Florida no-fault auto insurance system has been debated for years.

Florida has been working to overhaul or replace its PIP for several years. It is blamed for the high and ever-increasing insurance premiums motorists are required to pay.

“We know that the PIP system is broken,” said Erin Grall (R-Vero Beach), sponsor of the bill. “There is extreme value in transitioning to a new system without adding additional layers of policy that may not be necessary.”

That said, as the proposal makes its way forward, House members have stated that the MedPay coverage proposal requires additional work before it would be usable. Moreover, there are a number of issues that would need to be ironed out regarding opening the doors to “bad faith” lawsuits filed against insurance companies.

Bryon Donalds (R-Naples, the subcommittee chairperson, said he is interested to see how this proposal unfolds as PIP is currently playing the role of a “quasi-health care system.”

No-fault auto insurance system - car crashThe state Legislature has been seeking to repair or replace the PIP portion of the no-fault auto insurance system for quite some time. This latest effort appears to be among those with the most promise of moving forward.

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