House Committee Advances Florida Auto Insurance Reform Bill

A bill aimed at making dramatic changes to Florida’s car insurance system cleared its second hurdle on Wednesday when the House Civil Justice Subcommittee approved the measure in a 10-5 vote, despite serious reservations voiced by many of the subcommittee members.

The bill would render the state’s no-fault coverage structure virtually unrecognizable.

Florida currently has a no-fault insurance system that requires motorists to carry at least $10,000 in personal injury protection (PIP) that pays for any of the policyholder’s medical care–up to the policy limits–that’s needed because of auto accidents.

But the author of the reform bill, Rep. Jim Boyd–and many others who are advocating reform–say insurers are overpaying on those policies because policyholders are getting overtreated, and unscrupulous individuals are staging accidents and inflating medical bills in order to cash in on policies.

To alleviate the problem, Rep. Boyd’s bill would make it so that non-emergency medical care is no longer covered under the mandatory coverage required of Florida motorists.

Taking the place of PIP would be emergency care coverage, which would only cover emergency room visits within 72 hours of a crash.

“If you’re injured in an automobile accident, taken to the emergency room, whatever treatment they need to provide to get you better or get you back on your feet or get you out of there is covered,” Boyd said at Wednesday’s subcommittee meeting. “And if they determine there’s follow-up care necessary, that will be referred by the emergency room physician to the appropriate provider.”

But if that follow-up care or referral is for a non-emergency injury, the patient would have no coverage for that care under mandatory auto policies. Patients would need to have a medical payments policy or standard health insurance to have it covered.

By cutting down on overbilling and overtreatment, Boyd says, average premiums would drop for drivers making auto insurance comparisons in Florida, although no one has ventured to estimate the extent to which they would be reduced.

“It is impossible for us at this point to quantify a specific number of savings that would be associated with this bill,” said Monte Stevens, of the Office of Insurance Regulation. The reason is that “this is pretty much creating a new type of coverage that has never been priced either in Florida or, that I’m aware of, in another state.”

Stevens compared the car insurance changes to similar reforms that drove down the cost of  workers’ compensation 65 percent over the course of seven or eight years.

“I can’t say with any degree of certainty that that will happen to that degree in the PIP system,” Stevens said. “But what I can tell you is there is no question that abuse and bad actors are causing the rates to go up for everyone,” and that the changes in this bill should result in some savings.

Representatives on the subcommittee express concern over many parts of the bill, mostly focusing on the reduction in coverage, the 72-hour window and the requirement that claimants get treated at a hospital E.R.

Regarding the E.R. requirement, Rep. Jose Oliva said he was concerned about “what that means in high-density areas because it will load up our hospitals, and what it means in rural areas where people are 20 miles away from a hospital.”

Other provisions of the bill include:

  • Expanding the requirements for long-form police reports so there is more extensive documentation of who was in the car at the time of the crash
  • Capping attorneys’ fees in individual and class-action disputes
  • Allowing insurers to require policyholders and medical care providers to submit to examinations under oath after a claim

The subcommittee’s vote was split down party lines, with the 5 Democrats on the subcommittee voting against it and the 10 Republicans voting to advance it.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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