Fla. ‘No-Fault’ to Sunset, CFO Urges Legislators to Act

September 18, 2007

Florida Chief Financial Officer Alex Sink sent a letter to Gov. Charlie Crist, Senate President Ken Pruitt, House Speaker Marco Rubio and other legislative leaders urging legislative action to either reform Florida’s No-Fault Law or, if Florida should return to a tort-based system, address two pitfalls to protect consumers.

Without legislative action in the next thirteen days, Florida’s Motor Vehicle No-Fault Law, which requires Personal Injury Protection (PIP), will cease to exist, Sink wrote.

The CFO pointed out that the statutes, set to expire on Oct. 1, include important financial and legal safeguards for Florida motorists.

While Sink praised legislators and Crist for “working diligently to determine the best course of action for Floridians on this issue,” she said she supports reforming the No-Fault Law provided anti-fraud law enforcement efforts are increased and cost controls such as a fee schedule and utilization limits are instituted.

“I urge you to use your good offices to bring the parties together and forge consensus to reform the No-Fault Law with these important consumer protections,” Sink wrote. “We can reduce much of the current fraud in the system with these and other beneficial changes. If it is your decision to return Florida to a tort-based system, however, we must take immediate action to produce a transition that is in the best interests of Floridians.”

In reference to an upcoming special legislative session scheduled to begin Oct. 3, Sink highlighted it as an opportunity to “fix two significant problems:”

1. Protecting Floridians injured in an accident through no fault of their own: In absence of the No-Fault Law, Florida will require motorists to purchase insurance that covers damages to others’ property, but fails to require this same financial protection for innocent Floridians injured in an accident. This means that Florida law will protect cars, but not people.

Floridians injured in an automobile accident through no fault of their own may have to pay for their own medical treatment or face the prospects of taking legal action (and a prolonged resolution) to cover their medical bills. Nearly every state in the nation requires some medical benefits insurance coverage, and failing to mandate this insurance protection is not in the best interest of Floridians, Sink said.

2. Restoring enforcement powers to the Department of Highway Safety and Motor Vehicles (DHSMV): The expiration of Florida’s No-Fault Law weakens the ability of the DHSMV to enforce the law.

We have asked for and received a recent memorandum from the DHSMV, which states the department’s enforcement authority will expire when the No-Fault Law sunsets, Sink wrote. DHSMV will be unable to require drivers to keep their Property Damage Liability coverage once a car is registered with the state. It would also be well-advised to review our insurance fraud laws and remove outdated references to the No-Fault Law that may cause confusion and possibly undermine our ability to prosecute those persons committing fraud, she added.

Sink said the first priority should be to reform the current No-Fault Law: “But if we must return to a tort-based system, I urge you to add legislation to the call of the upcoming special session to require mandatory medical benefits insurance and restore enforcement powers to the DHSMV and our law enforcement officials who work very hard to keep our highways and roads safe.”

Source: Florida Department of Financial Services

Topics Florida Fraud

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