Key Florida Senator Looks to Scrap PIP Car Insurance System

After hearing from consumers, regulators, law enforcement officials, judges and the auto insurance industry, David Simmons has made a decision:

“It’s time to move on from PIP,” Simmons said.

The Republican state senator and chair of the Florida Senate Banking and Insurance Committee told Online Auto Insurance News (OAIN) he will propose scrapping Florida’s no-fault personal injury protection (PIP) auto insurance. All he’s waiting on is more data on possible effects of the switch.

State auto insurance laws require motorists to carry at least $10,000 in PIP coverage, which is essentially health insurance for the driver and any passengers but only applies to car accident injuries. The system has been gamed by criminal fraud rings that stage elaborate accidents for a quick payout. Floridians who live in areas with high levels of fraud end up paying more for insurance as a result, according to one study.

Simmons said he will propose replacing PIP with mandatory bodily injury liability, which is required in most states. Mandatory bodily injury requires officials to establish who was at fault in a car accident, and then the responsible driver’s insurance pays for other injured drivers’ and pedestrians’ hospital care, which Simmons said will help cut fraud in many cases.

Short on Specifics

Simmons has previously introduced legislation to end PIP in Florida, but that proposal stalled. Lawmakers and insurers were concerned about a lack of data and study put into the proposal, and the bill was filed for consideration with just a few days left in the session, making changes much more difficult.

Simmons said he has learned from that legislative setback.

This go-round, the Senator has sought buy-in from trial lawyers, insurance companies and other interested parties to help garner support for his proposal. He’s also asked the Florida Office of Insurance Regulation for a comprehensive insurance study with the hopes of swaying key lawmakers in the upcoming session.

“We want people to have as much input as possible,” Simmons said. “I’m asking the Office of Insurance Regulation to do a thorough analysis. They’re beginning in November, we’re going to make a very thorough and complete analysis before doing anything.”

Simmons said not to expect legislation to be filed until that data is collected. However, he does expect that most motorists will see “material savings” after they switch from no-fault to a liability system, although he would not offer a figure for how much those savings might be.

With the bill yet to be filed, there is a legitimate question whether other legislative issues in Florida will take attention and time away from Simmons’s call to end PIP.  However, Simmons said the political push, especially from insurance companies, will help push the Legislature towards passage of a bill replacing PIP.

He said he also has discussed the idea with Democrats and other governmental officials.

“Many stakeholders believe the system is so flawed we need to change,” Simmons said. “PIP currently creates a billion dollars worth of waste! What system has a billion dollars worth of waste per year?”

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