No-fault insurance: Florida studies killing it in report due Sept. 2

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EGB_FlyerState officials are putting in motion a $125,000 study on the possibility
of dropping the state’s no-fault Personal Injury Protection car insurance system.

Officials plan to choose a vendor to work on the report by June, with a draft due Aug. 26 and a final report due Sept. 2, records from the Department of Financial Services show.

As The Palm Beach Post reported in March, 2012 legislation was supposed to eliminate up to $1 billion in fraud and cut no-fault car insurance bills, but records requested by the newspaper show whopping premium hikes up to 40 percent by Florida’s top insurers since the start of 2015.

Among the biggest bill raisers: Allstate Fire and Casualty Insurance Co. has increased PIP premiums 39.8 percent and overall bills 30.7 percent, while for Geico General Insurance Co. and Geico Indemnity Co., the jump has been 22.8 percent for PIP and 18.1 percent overall.

“Consumers are getting robbed,” said driver Michael Dorsett of Lake Worth.

The state-required $10,000 in PIP coverage, begun in the 1970s, was designed to cover minor injuries regardless of who is at fault in an accident while avoiding lawsuits. But PIP produces mountains of its own lawsuits, and as many drivers see it, the fraud-prone system effectively makes them pay twice for medical coverage they already have from Medicare, employer plans or other health insurance.

Florida is one of a handful of states with a no-fault system and drivers pay the fourth highest car insurance bills in the nation.

Among the report’s objectives: Study “the potential impact to Floridians if the personal injury protection coverage requirements were repealed and replaced with varying levels of bodily injury coverage, or if the current requirements to purchase auto insurance were completely repealed.”

The findings could help legislators as they explore dumping PIP. One option is requiring bodily-injury liability insurance, which most states do. More than 90 percent of Florida drivers already have that coverage.

State Rep. Bill Hager, R-Delray Beach said, “I plan to reintroduce my legislation repealing PIP in 2017.”

Given “the cycle of change of this magnitude, it may take a year or two to get through,” Hager said.

Sen. Jeff Brandes, R-St. Petersburg, also sponsored legislation to repeal PIP by 2019 that made little headway this winter, but he said the conversation has begun and needs to continue over the summer. As he has put it, “The system is broken and rife with fraud and abuse. There is no amount of tweaking that will fix PIP. Florida can do better.”