House Committee Gives Green Light to Auto Insurance Reform

The Florida House Insurance & Banking Subcommittee on Monday passed legislation to repeal the state’s at-fault Personal Injury Protection (PIP) system and replace it with requiring drivers carry at least in limits of at least $25,000 per person and $50,000 per incident in bodily injury coverage.

Florida’s PIP laws have been subject to numerous reform attempts with the last one being in 2012. While supporters of that effort promised rate reductions, since January of 2015, PIP rates have gone up by 25 percent in Florida.

“The value of this insurance has gone down with each reform,” said Rep. Erin Grall, the sponsor of the legislation. “The goal of the bill is to put meaningful insurance in place and bring accountability to the system and put responsibility where it lies and that’s with the at-fault driver.”

The legislation is a key component of FJA’s Responsible Roadways Agenda. FJA President-Elect Dale Swope reminded the committee that PIP is an idea born in the 1970s that needs to be retired.

“Our system was made in the 70s in this Utopian idea that we’re going to treat everybody the same with a no-fault system. The guilty are treated the same as the innocent. The irresponsible driver under PIP is treated the same as the responsible driver. Nobody has to have insurance for bodily injury if you don’t want to have it. It’s strictly up to you,” FJA President-Elect Dale Swope noted in his testimony before the committee. “That was the idea from the 70s and it’s old and it’s tired and it’s beaten up. The $10,000 benefit that was set in 1979 was set at a time when the average price of a car was $3,600. The average price of a car last year was $34,000; ten times as much.”

The proposal considered by the committee is estimated to bring down liability costs for drivers by an average of 8 percent statewide. Even more important is how the legislation encourages personal responsibility on Florida’s roadways.

That’s a message carried by Adrienne Gorham from Edgewater. She and her two children were involved in a serious traffic accident with a driver of a luxury sports car who was carrying bare-bones PIP insurance coverage. Like many in Florida involved in accidents with people with bare-bones PIP coverage, Ms. Gorham ended up being responsible for expensive health care bills – even though she was not at fault in the accident.

“I’m thankful to God that we survived this but it was the beginning of a nightmare that continues to haunt us today because the man that was driving the $50,000 luxury car had only a minimum of $10,000 in PIP insurance,” Gorham told committee members as she shared the story of the accident and its aftermath. “The minute 9-1-1 was dispatched and the ambulance and the helicopter came, we arrived at separate hospitals, the insurance liability had already passed its limits and the bills started running up.”

Gorham told the committee that she doesn’t have health insurance and has to avoid phone calls from bill collectors demanding payment.

“This is all because we were simply in the wrong place at the wrong time. My family suffers because somebody else acted irresponsibly and I’m here today because I want something good to come out of it,” Gorham said. “We are proof that irresponsible drivers can hurt other people when they’re behind the wheel. When it happens, they should at least have enough insurance to fix the lives they have completely broken.”

The legislation now moves to the House Commerce Committee for consideration. The Senate Banking and Insurance Committee is scheduled to hear the companion bill (SB 1766 by Sen. Tom Lee) on Monday.

PCS/HB 1063 Vote Count:

Yes:        Beshears, Burgess, Clemons, DuBose, M. Grant, McGhee, Moraitis, Russell, Santiago, Shaw, Stark, Stevenson

No:         Fant, Ingolia