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Insurance Consumer Advocate

Sha'Ron James

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Gov. Rick Scott eyes car policy change

By Tim Engstrom, Fort Myers News-Press

August 19, 2011

Efforts to revise or even scrap Florida’s no-fault auto insurance system could lower insurance premiums for well-insured drivers, but could drive up the cost of bare-bones policies, industry experts said. Florida drivers are required to carry a minimum of $10,000 personal injury protection, but Gov. Rick Scott has said he wants to make that coverage optional.

Critics of the so-called PIP system say that by guaranteeing as much as $10,000 of medical coverage for every automobile accident, regardless of fault, it offers an incentive to people willing to cheat the system by staging accidents.

“I kind of think the governor is heading in the right direction with this,” said Tim Shaw, president of the Tim Shaw Insurance Group in Fort Myers. “I’ve always thought the PIP was just a $10,000 paycheck for every fender bender.”

Last week, Florida Insurance Consumer Advocate Robin Smith Westcott announced she would form a working group to propose changes to the law by November.

Legislators, personal injury attorneys, insurance professionals and health care experts will be included in the group.

Members will be announced by the end of the month, Westcott said Monday.

“This is not a completely new discussion and we know that cost of coverage is skyrocketing for consumers,” Westcott said.

Personal injury protection claim payments are up about 66 percent from about $1.5 billion in 2008 to about $2.5 billion in 2010, according to the Office of Insurance Regulation’s review of the 2011 Personal Injury Protection Data Call.

Shaw said personal injury protection adds an average of $100 to $130 annually to insurance premiums.

“If they got rid of PIP requirements, I think they would have to have a minimum bodily injury requirement,” Shaw said. “That won’t affect people who already carry that coverage, but the people who only pay enough to get a license tag would have to pay more.”

Bob Rosier, an independent insurance agent in Bonita Springs, said when Florida’s no-fault system first went into effect in 1972, it was intended to cut down on lawsuits from minor accidents.

“We fought so hard to get no-fault, I would hate to see it go,” Rosier said. “But, I can see where it might have to because it isn’t doing what it is supposed to do.”

Lawyer John Morgan, whose Morgan & Morgan firm specializes in personal injury cases, said other requirements, such as mandatory personal injury coverage, would have to take the place of no-fault coverage.

“There is no question there is a whole subculture out there of people staging accidents, but the question is whether you want to throw the baby out with the bath water,” Morgan said. “What really should happen is they should get rid of PIP and require everyone to have $25,000 in personal injury coverage.”

John Wiest, chief operating officer of the Lee Memorial Health System, said any changes in the law will impact hospitals around the state.

“It is a big deal for us and we will be watching it closely,” Wiest said. “I know there are times that the $10,000 (from PIP coverage) is all we end up collecting for treatment after an accident.”