jump to main menu jump to subject menu jump to content jump to footer

Insurance Consumer Advocate

Sha'Ron James

Contact Us
Mailing: 200 East Gaines St.
Tallahassee, FL 32399-0308

For Consumer Assistance:
Contact the Division of
Consumer Services within the
Department of Financial Services

Online at
Consumer Services
Toll-free in Florida
Out of State
(850) 413-3089
(850) 413-3033

Public Records Requests

Follow the ICA on Twitter

design placeholder only

PIP Reform Efforts Racing to Session's Finish Line on Separate Tracks



By: Jim Turner


Sunshine State News


Salvaging the state’s supposedly low-cost auto insurance option will come down to the final day of the legislative session.

With Gov. Rick Scott increasing pressure Thursday on legislators to pass a bill that he says will reduce fraud in the personal injury protection system, House Speaker Dean Cannon told members that he doesn’t expect the Senate’s bill will be discussed until Friday.

Scott, joined by Chief Financial Officer Jeff Atwater and Insurance Commissioner Kevin McCarty, held a news conference in Scott’s Capitol office shortly before the House began its floor session late Thursday afternoon.

And the message continues to favor the proposal offered by the House.

“We have to make sure we have a system where you can't say you were in an accident when you weren’t there,” Scott said.

The House bill, HB 119, requires those injured in auto accidents to get treatment in an emergency room within 72 hours or with the medical provider of their choice if the cost is under $1,500.

Scott has said the failure to approve the reform package would be a $1 billion tax on motorists, noting that fraud in the system has helped drive premium costs up that amount.

“This is individuals taking advantage of a state-mandated system,” Scott said. "(Voters) expect us to fix this.”

The Office of the Insurance Consumer Advocate, which is backing the reform effort, on Thursday estimated that PIP losses have caused rates to grow 81 percent since 2008, representing a $1.4 billion hike.

“For every dollar of PIP premium in 2011, insurers incurred costs of $1.18,” the office stated in a release.

McCarty estimated that failing to revamp the insurance would mean premium increases of 30 percent a year.

The House received the Senate version of the reform effort and debated the bill, SB 1860, late Thursday.

Scott has declined to say he would call legislators back after the session end Friday to complete the reform effort. A number of legislators, including Senate President Mike Haridopolos, R-Merritt Island, anticipate there will be a need for a special session on the issue.

Sen. Joe Negron, R-Stuart, is more optimistic.

"I think we're pretty close on this," he said late Thursday.

However, Haridopolos said Thursday night that limitation on trial lawyer fees could be stumbling blocks to complete negotiations on Friday.

"There are a lot of moving parts in this," he said.

If the system can’t be fixed, the alternative would be to replace the system with the next low-cost option, bodily injury coverage, Scott said.

Bodily injury coverage costs would be expected to increase with more demand on the option.

The Senate bill tightens procedures for licensing medical clinics and authorizing who can provide treatment, requires long-form incident reports as a way to root out staged accidents, updates the bill-payment system and gives hospitals priority standing in personal injury protection claims.

Senators have added an amendment that requires those involved in a crash to seek medical help within two weeks.

The House bill also caps attorneys' fees in both individual and class-action disputes.

The Senate allows chiropractors to perform some treatment, and both chambers prohibit massage therapy and acupuncture as covered treatment.

The no-fault insurance, which provides $10,000 of coverage to motorists, is often the only coverage many motorists hold.

Bill Newton, executive director of the Florida Consumer Action Network, argues Scott and other backers of the House bill are “scrambling to scare consumers” to help insurance companies.

“Their attempts to link attorney fee multipliers to a huge increase in insurance premiums flies in the face of the state’s recent data that show attorneys' fees are a mere 2.4 percent of total PIP costs,” Newton stated in a release.

“Governor Scott and CFO Atwater also take issue with the 25 percent auto insurance rate reduction mandated by the Senate’s PIP bill. The governor claims this rate reduction would lead to higher auto insurance premiums. How in the world could a required 25 percent rate decrease actually turn into a premium increase? We may live in a state that boasts of magical kingdoms, but this is the stuff of fantasy.”

The network has been joined by the Florida Medical Association, Florida Justice Association, Florida Chiropractic Association, Florida Osteopathic Medical Association and the Florida Public Interest Research Group in support of the Senate bill.

McCarty said there is no actuary basis that the Senate changes would reduce rates.