No Fault Auto Insurance to fade away?

05/07/07 Mitch E. Perry
WMNF Drive-Time News Monday | Listen to this entire show:

Florida lawmakers last week failed to find a way to reform the state’s no-fault auto insurance law.


That means the current regulation  – which requires drivers to purchase personal injury protection, or PIP, will expire on October 1st.


Among those rejoicing that such a law could soon die are auto insurers themselves, who contend that hospitals are charging them too much for the system.  (roll tape#1 o.q”massive abuse within the system”)


Allison Jones is with the group Floridians for Lower Insurance Costs, a group backed by some of the biggest insurance groups in the state, including State Farm, Allstate.  She told Florida Public Radio that the mandated $10,000 of coverage per driver is breeding fraud because doctors and clinics end up billing for unneeded treatment to collect the full amount of the benefits (roll tape#2 o.q.”a PIP Claim”)


And Floridians for Lower Insurance Costs says that, by eliminating PIP, Florida drivers will save  hundreds of dollars in auto insurance costs now.  


But representatives from Florida hospitals say this could create a financial hole for injured drivers who don’t have health insurance, and they’ll be left holding the bag.


Rich Rasmussen is with the Florida Hospital Association.  (roll tape#3 o.q.”in a motor vehicle accident”)


For those drivers with health insurance, the expiration of the law is good news, since they will no longer have to pay for medical coverage that duplicates their health plans.


But what about those drivers who do NOT have health insurance?


Russell Lazega is an attorney based in Miami.  He says many drivers are now going to go without adequate protection.  (roll tape#3 o.q.”no coverage”)       


The Florida Senate had proposed extending the current no-fault law for 4 years and provide funds to hire more prosecutors and fraud investigators – but those fraud provisions were later stripped from the bill.


However, The Florida Hospital Association’s Rich Rasmussen says that the legislature did address how to deal with fraudulent claims made by doctors (roll tape#4 o.q.”other providers”)


Auto insurers in Florida are enjoying profits – but analysts say they generally experience losses when it comes to selling the mandatory PIP or no fault coverage.


Attorney Russell Lazega says that many drivers will still want protection, and will end up paying for another program that makes more money for the Car insurance companies. He used his own case as an example (roll tape#4 o.q.”lucrative product”)


The Florida Hospital Association’s Rich Ramusses says the central question that policy makers need to ask themselves this question (roll tape#4 o.q.”


Like several other bills that were not supported by the time the legislature ended last Friday, there has been talk that negotiations on some type of bill addressing no fault could come back up next month during the Special Session, ostensibly to focus on Property Taxes.


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