Much to the consternation of many auto insurance companies Florida PIP looks like it is off the chopping blocks. According to Christopher Kise, a counselor to the Governor Crist, the new pip bill is a compromise between the House and Senate and is likely to be approved by governor.
The new PIP bill is the result of a compromise between Senator Bill Posey, of Rockledge and Representative Ellyn Bogdanoff, of Ft. Lauderdale. Both legislators are Republicans. Posey claims that it has the backing to pass in both houses. The big insurance companies like Allstate and State Farm want PIP out. They claim it is so full of fraud and abuse that it should be scrapped. They have provided the State with rate proposed rate decreases showing the average consumer would save hundreds each year in insurance costs if PIP expires.
Major features of the bill are that PIP stays limited to $!0,000.00 but $5,0000 of that must be set aside for emergency room care. The new system would include a medical fee schedule to rein in medical costs. Fee schedule caps would limit payments to 200 percent of Medicaid fee schedules for medical charges.
The no fault system was put in effect nearly four-decades ago at the behest of big insurance companies. The original intent of the no-fault system was to limit lawsuits for pain and suffering in auto accidents. The law provided limited medical benefits of $10,000.00 and in return prevented any recovery of pain and suffering damages unless the injured person had a permanent injury or significant scarring in a car accident. The idea was that insurance costs would go down if pain and suffering suits were limited. The problem is that medical, chiropractic and other clinics and even hospitals charged patients very high rates for treatment under PIP and often over treated patients for minor injuries until the $10,000.00 in PIP was exhausted. Further the permanent injury limitation did not curb lawsuits because suits were still filed, the focus just became whether or not the injuries were permanent. Further, litigation skyrocketed between insurance companies and physicians and hospitals fighting over the propriety of medical charges under PIP. Thousands of cases clog the State County Courts where the sole issue is a debt alleged to be due under PIP. Abuses continued to the point that a 2000 Florida grand jury concluded that the system was rife with fraud. They found that doctors specializing in auto accident treatment were providing unnecessary and overpriced medical treatment. In return the physicians would vouch for a permanent injury to the patient to support a lawsuit for damages.
Florida insurance rates are consistently among the highest in the nation. For the 80% of Floridians with health insurance paying hundreds of dollars per year for limited coverage of only $5,000.00 in non emergency care and in turn getting a limitation on their rights for personal damages is a questionable trade off. Curiously, it is two Republican lawmakers, supposedly the party of limited government and personal responsibility, that are pushing the continuation of the mandatory PIP coverage. One wonders why they do not push instead for mandatory bodily injury liability coverage which would hold only negligent parties responsible for the injuries they cause instead of requiring motorists to pay to limit the liability of negligent drivers as happens under the PIP system. Other states like Colorado have scrapped PIP with success. Time will tell if the Florida PIP law changes fix or merely prolong a broken system.
For more information on this subject, please refer to our section on Car and Motorcycle Accidents.