Demise Of No-Fault Insurance Will Cut Costs For State Motorists

Published: May 10, 2007

The Legislature's refusal to extend Florida's no-fault auto insurance law came as a shock to many. Proponents of mandatory personal injury protection are scrambling to add the issue to next month's special session that will deal with property tax relief.

But lawmakers have had plenty of time to fix the broken no-fault system, which was ripe with fraud, and they should stick to property taxes when they meet again June 12.

Florida drivers now can expect a nice break in the cost of auto insurance at a time when they can really use it.

It may have made sense to adopt no-fault in 1971 when ambulance-chasing lawyers and crooked doctors clogged the courts with fender-bender lawsuits. But today Florida drivers pay among the highest auto insurance premiums in the country, and the demise of no-fault should bring about a reduction in rates.

State Farm, for instance, promises a 16 percent reduction. The company has already begun a phaseout of personal injury protection in policies issued or renewed after April 1. A two-car household can expect to save $360 on average.

Drivers will have the option but will no longer be required to buy up to $10,000 in coverage to pay for reasonable and necessary medical claims, as well as lost wages. Because most drivers have health insurance, they don't need PIP and certainly won't miss it.

Moreover, a cottage industry has grown up to grasp the $10,000 ring available in every accident, no matter how minor. And if the insurance companies challenge the quirky treatment methods required by some clinics, such as a crystalline yoga mat said to rid the body of toxins, the companies risk losing in court and paying even more, plus the other side's attorney fees.

A downside is that hospitals and medical clinics could lose as much as $350 million when the coverage expires, which is why they pushed mandating comparable coverage. The House actually tried to replace no-fault with $10,000 in emergency care coverage to cover expenses at emergency rooms and trauma centers, but to no avail.

Senate proponents of no-fault also tried to set a fee schedule in an effort to tame reckless billing practices, but that effort was stripped from the bill in favor of extending the sunset date four years for more study of the issues.

But there have been plenty of studies. Just last year the Legislature passed no-fault reform, but Gov. Jeb Bush vetoed the measure because it did not address a medical fee schedule, attorney's fees or agreed-upon treatment protocols. In other words, the 2006 version did not offer true reform.

Nothing has changed from then until now, and lawmakers wisely determined not to pass an inferior law in the crush of last-minute business.

Unless something changes and no-fault is raised in special session, Florida will join the 38 other states with a sensible fault-based system that holds drivers responsible for the damage they cause.

Floridians won't miss no-fault.