Florida lawmakers are taking another hard look at the future of the state’s no-fault automobile insurance law in light of a circuit court ruling that left opened the door to legal challenges over the constitutionality of the law.
The state’s First District Court of Appeals recently lifted an injunction issued by a lower court that had prevented a 2012 reform of the state’s PIP law from entirely going into effect.
The suit had been brought forward by a group of medical providers who challenged the constitutionality of the law on the grounds it impinged on accident victims’ access to the courts.
The First DCA ruled in the case [McCarty v. First DCA 13-355] that the medical providers did not have standing to bring forward the suit, saying such a suit could only be brought forward by actual accident victims. In so doing, the circuit court left open the possibility of further challenges by accident victims and attorneys.
Senate Banking and Insurance Committee Chair David Simmons (R-Altamonte Springs) said in light of the court ruling it is incumbent on lawmakers to revisit the law.
“We’re going to look at this again because we’ve got no answers from the First DCA,” said Simmons at a committee meeting. “They, by some accounts, gave us a roadmap [saying] that we better do something.”
A draft bill circulated by Simmons would eliminate PIP in favor of requiring every driver to cover bodily injury coverage with a minimum coverage of $25,000 per person and $50,000 for injuries to multiple accident victims.
State regulators said that 92 percent of Florida drivers currently are insured for bodily injury coverage, with 62.8 percent with coverage limits of $25,000/$50,000.
The industry, however, is split on the issue with some in favor of moving to a tort system, while others continue to back the 2012 reforms.
Property Casualty Insurers State Government Relations Counsel Donovan Brown said he understands Simmons’ concerns. However, he said, given the First DCA’s ruling, PCI continues to believe the 2012 reforms should be given a chance.
“Simply stated, the injunction created mass confusion in the marketplace,” said Brown. “But here we are a year and a court case later and the reforms can now be fully implemented.”
Other industry representatives had a different view.
American Insurance Association representative Gerald Wester said the AIA supports the repeal of PIP in favor of mandatory BI coverage. Echoing Simmons, Wester said that the courts are likely to keep the future of PIP in question.
“It is a shame that six days after the bill took effect, litigation was filed,” said Wester. “It was not even given a chance to see how this law is going to operate.”
One issue that has been a sticking point in any discussion about moving from a PIP system to a tort system is whether or not insurers must provide med-pay coverage.
An amendment to the draft bill would require drivers to have $10,000 in medical emergency coverage for treatment provided by ambulance providers and for emergency hospital services.
Regulators noted that few drivers currently carry med-pay coverage, with most having coverage limits of $5,000 or less.
Wester said it is important that emergency medical providers are reimbursed for their services. However, he said AIA’s position is that the coverage should be optional and steps should be taken to ensure it does not become another source of fraud.
“We want to be careful and not make it PIP junior,” said Wester.
Brown noted that out of 38 states that have a tort system only three states mandate that drivers carry med-pay coverage. He also said that any potential move to repeal PIP must include tort reform, a position held by the industry as a whole.
“Insurers will continue to support bad faith reform,” said Brown. “It is crucial to moving to any type of litigation system in Florida.”