Insurance

No More No-Fault?

In 1971, Florida became the second state to pass a no-fault auto coverage law and require motorists to have personal injury protection (PIP) coverage. Now the law requiring motorists to carry no-fault coverage is scheduled to expire

Oct. 1. The insurance industry, medical providers and lawyers last year couldn't agree on changes, so legislators voted to extend the deadline for two years. Outgoing Gov. Jeb Bush, intent on forcing a resolution this year, vetoed the extension. Now, the Property Casualty Insurers Association of America advocates letting no-fault die and joining the 38 states without it. "PIP essentially has been the pot of gold at the end of the rainbow" for the legal and medical professions, says the association's William Stander. Insurers complain of "hard" fraud -- injury claims from fictitious wrecks -- and "soft" fraud such as claims for nebulous injuries from real wrecks.

Letting no-fault die would be a financial disaster for hospitals, counters Ralph Glatfelter, a lobbyist and senior vice president of the Florida Hospital Association. Health insurers would have to bear the costs for insured people, while healthcare providers would have to suck up -- and pass on the costs to other customers -- the cost for the uninsured, he says. He estimates the shift for hospital care alone would total $300 million, absorbed equally by insurers and hospitals. "It will drive up the costs for hospitals and drive up the cost of health insurance," he says.

"The Legislature cannot allow no-fault to be repealed and not submit something in its place."

That something could include mandatory bodily injury coverage of $25,000 per person and $50,000 per accident or mandatory medical coverage, limited to ER and hospital care, for $20,000 to $25,000.

Sam Miller, of the Florida Insurance Council, whose group has no formal position on letting no-fault expire, predicts a compromise.

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