Florida Subcommittee Passes PIP Repeal Bill

Posted by on Jan 30, 2012 | 0 comments


January 25, 2012

Florida moved closer to putting an end to its personal injury protection automobile insurance system, which the insurance industry says is plagued by abuse and fraud.

The Florida House Civil Justice Subcommittee passed HB 119 this afternoon. The bill replaces the mandatory PIP, no-fault insurance coverage with “emergency care coverage.”

The American Insurance Association, a supporter of PIP repeal, released a statement to commend the subcommittee. For years the industry has alleged fraud by the state’s healthcare clinics, along with outrageous attorneys’ fees and organized staged-accident rings to take advantage of holes in the system.

The Florida Insurance Council, Property Casualty Insurers Association of America (PCI), Reinsurance Association of America, and the Bermuda Association of Insurers & Reinsurers are also backing efforts by to reform the state’s auto insurance system.

“Florida is the No. 1 state in the nation for staged accidents, which has resulted in an unnecessary, nearly $1 billion fraud tax on consumers over the last 3 years,” PCI says in a statement. “With four out of the 10 U.S. cities with the highest rate of questionable auto claims being right here in Florida – Tampa, Miami, Orlando and Hialeah – we must transform Florida’s no fault system now, so Florida’s most honest consumers and businesses do not continue to get stuck with the tab.”

The industry would appear to have the backing of the state’s leaders. Also today, Gov. Rick Scott, Chief Financial Officer Jeff Atwater, Insurance Commissioner Kevin McCarty and Consumer Advocate Robin Westcott gathered in front of the state capitol in Tallahassee to promote reform.

In Scott’s state of the state address earlier this month he laid out the case for reforms to cut down on fraud.

Scott and Atwater have outlined four steps to reform the no-fault law, first enacted in the early 1970s, which requires drivers to have PIP that provides $10,000 in coverage per person for medical bills, regardless of fault in an accident.

HB 119, among many things, would change accident reports are taken, provide coverage limits, establish a schedule of maximum charges, create a list of diagnostic tests deemed not to be medically necessary, and control attorneys’ fees.

The bill now goes to the Economic Affairs Committee, AIA reports.

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