Florida's failure to repeal PIP could cost drivers more in the future
Vetoing the bill sends the wrong message to consumers concerned about rising rates and excessive litigation that clogs Florida courts.
With the stroke of a veto pen, Florida governor Ron DeSantis has kept personal injury protection (PIP) and all the shenanigans that go along with this coverage alive and well. I will be the first to admit that this bill was far from perfect, but it was a much-needed start.
According to the governor’s office, there was concern that it could result in rising premiums. What is missing from this concern is that Florida currently does not require motorists to carry bodily injury coverage. So, yes, the motorists who do not currently have bodily injury coverage would have likely seen an increase in premiums. However, they would have largely been offset by not having to pay for PIP, a coverage riddled with fraud, waste and abuse. As for the rest of Florida’s drivers who carry full coverage, they would have likely seen a reduction in premiums, especially for uninsured motorist (UM) and underinsured motorist (UIM) coverage, both of which are currently among the highest in the nation.
Looking ahead
Why would a governor who generally gets things right get this wrong? There are likely many reasons, but first and foremost is that next year is an election year. The governor was under a tremendous amount of pressure from lobbyists to veto the bill. While the concern about those who can least afford it having to pay more for insurance is valid, it should not be lost on consumers that Florida has had bad legislation for years by not mandating liability insurance for anyone driving a motor vehicle. In fact, Florida is only one of two states that do not require BI coverage.
So what is the best path forward for Florida? We know the Sunshine State is the fraud capital of America. PIP is a large driver of this, but getting rid of PIP would simply move the purveyors of fraud from first-party to third-party coverage.
As we learned in my insurance fraud thrillers, “Swoop & Squat” and “Deep State,” the prevalence of fraud is driven by the abundance of insurance coverage with a tremendous financial incentive and little risk for penalty. Having one less line of coverage to investigate, fight and defend would be a win for both consumers and insurers. Getting rid of PIP should be paramount to any future litigation.
Addressing the problems
But the legislature needs to do better than SB 54. Nearly 20% of drivers on the road in the state have no insurance at all. That is among the highest percentage in the nation. A valid concern voiced by insurers was that SB 54 would lead to an increase in uninsured motorists. While potentially true, it should have been addressed. There need to be severe penalties for operating a motor vehicle on the road without insurance. Some states have put such penalties where those driving uninsured are barred from filing lawsuits for non-economic loss. This is a fair approach that has been very successful.
The state also needs to look beyond insurance to the root causes of our excessively high auto insurance rates. Arguably one of the biggest contributors is that Florida is a pure comparative negligence jurisdiction. This means that regardless of fault, a person is allowed to bring a lawsuit, even if they are 99% to blame for the accident. Most states have modified negligence laws that bar such litigation when a person is primarily responsible for a loss, which is a common sense and fair approach that Florida should adopt.
While the legislature took a stab at bad faith in SB 54, it didn’t include overly effective language and likely wouldn’t have resulted in a noticeable reduction in bad faith litigation. Perhaps a better approach would be to include good faith legislation that provides insurers with the steps needed to always be acting in good faith when handling claims.
The real problem with vetoing SB 54 is that it does send the wrong message to consumers who are legitimately concerned about rising insurance rates and the excessive litigation that clogs the courts in Florida. In this case, the lobbyists had a clear victory, while the governor likely sees his veto as one less wedge issue in next year’s campaign, which is probably true.
Hopefully, the legislature will take another stab at repealing PIP, but my guess is nothing meaningful would happen until at least 2023, if ever.
Christopher Tidball is an executive claims consultant with more than 30 years of experience in the auto insurance industry. He is the author of multiple books, including Re-Adjusted: Taking Your Claims Organization From Ordinary to Extraordinary, the insurance fraud thriller, Deep State, and the TV screenplay, The Adjuster. To learn more, visit www.christidball.com. Views expressed are the author’s own.
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