Every car owner in Florida must have Personal Injury Protection coverage, known as PIP — it's mandatory. That hasn’t changed in nearly 50 years, but what has changed is the price of coverage. Florida is one of the top 5 most expensive states for car insurance. Lawmakers want to lower the cost by eliminating PIP and replacing it with Bodily Injury Coverage
Rep. Erin Grall, R-Indian River, has been working nearly her entire legislative tenure to reform PIP coverage. She’s brought the legislation forward multiple times. And she has three main reasons why now is the time to walk away from PIP.
“The adequacy of coverage with just a PIP requirement in the state of Florida of $10,000 is equal to about $1,400 if you look at how inflation has worked over time,” Grall said.
Grall’s right. The coverage your grandparents got in 1971 is still the same that’s required today. And she says the majority of drivers already have health insurance that covers injuries in an accident.
“88% of Floridians have some form of health insurance. Whether or not its employee, employer paid, military, Medicare or Medicaid or a self-insured program,” Grall said.
Grall says getting rid of PIP - which most people don’t need - could lead to fewer lawsuits and a drastic decrease in overall car insurance rates.
“Some numbers show that there were as many as 84,000 PIP claims last year ... so that’s litigation right now in our courts,” Grall said. “The 2017 numbers show that there were just over 60,000 [claims]-- making up a fourth of all cases filed in the state of Florida.”
Grall points to Colorado as an example of what could happen in Florida if PIP is repealed.
“Overall ,they have seen a 33% to 35% rate decrease in the move away from no fault coverage.”
But Derek Silver with the Florida Office of Insurance Regulation disagrees.
“Our analysis of the PIP bill is that if you were to repeal PIP rates eventually will go up,” Silver said.
This seemed to come as a shock to some lawmakers who for years have been told the rates would go down if PIP is repealed.
“Is that accessible to any of us the research that was done saying that this bill would cause rates to go up?” Rep Evan Jenne. D-Broward, asked.
“The Pinnacle study that was referenced is available," said Silver. "In terms of the other stuff that was used to make the commissioner's determination I can get back to you on that.”
But Paul Anderson with the Florida Association for Insurance Reform told lawmakers the Pinnacle study actually shows a different outcome.
“I have to question the basis on which OIR says that rates will go up,” Anderson said. “And also, as I mentioned, we already have coverage--most Floridians in bodily coverage--so if we’re eliminating the cost of PIP from our premium, why would our rates go up in any substantial way?”
The bill passed its final committee and heads to the Full House.
