Injunction of PIP law could pave way to elimination of no-fault insurance

A Leon County judge struck down parts of new law designed to lower costs and root out fraud in personal injury protection (PIP) claims on Wednesday, potentially pushing lawmakers to get rid of Florida’s no-fault system.

Sen. Joe Negron, R-Stuart, who sponsored the Senate version of last year’s HB 119, said Judge Terry Lewis’s temporary injunction striking down a $2,500 cap on non-emergency care and a 14-day deadline for treatment have him thinking about a plan to eliminate the PIP system in favor of mandatory bodily injury coverage. That idea was first floated by Sen. David Simmons, R-Maitland.

“I think this is an ideal time to look to Sen. Simmons to explore his bill ditching PIP and instead going toward a mandatory (bodily injury) system,” Negron said.

Under current law, PIP coverage provides up to $10,000 worth of coverage for injuries sustained in a car accident regardless of the party at fault. With bodily injury coverage, the insurance company of the party at fault in an accident would pay claims.

HB 119 passed the Senate by one vote on the last day of session last year under heavy lobbying from Gov. Rick Scott’s office. In addition to the non-emergency care cap and two-week treatment deadline, the law prohibits chiropractors and massage therapists from being compensated under PIP claims, which typically stem from automobile accidents. The law also takes aim at fraud, which supporters of the law say is responsible for an inflation of nearly $1 billion in auto insurance costs.

In a released statement, Scott said he would appeal the ruling.

“Our personal injury protection legislation was designed to stop the high costs passed on to Florida families by car insurance companies because of excessive lawsuits, waste and fraud,” Scott said. “Our reforms are working to lower insurance costs for Florida families and we will continue to fight special interest groups to keep them in place.”

Auto insurers warned lawsuits testing the new law would temper rate decreases, but studies predicted large drops in auto rates. Along with Negron, Chief Financial Officer Jeff Atwater complained insurers weren’t reducing rates enough when initial rate filings started to flow in.

Massage therapists and chiropractors challenged the law as unconstitutional, but were not granted a temporary injunction at the federal court level. Wednesday’s ruling gives them more hope, but insurers more heartburn.

Negron said his main reason for supporting the law was to reduce auto insurance rates, not to “provide a windfall for the industry.”

“I have every confidence that he could work with (the Senate Banking and Insurance Committee) to seriously explore replacement of the PIP system with mandatory (bodily injury),” Negron said. “But those are options. We’re certainly not going to make final decisions based on a temporary injunction.”

After speaking with reporters in his office late Wednesday, Negron headed to Simmons’ office.

Related Research: March 18, 2013 Order granting in part motion for temporary injunction in Case No. 2013CA73 before the Second Judicial Circuit Court of Florida.

Reporter Gray Rohrer can be reached at [email protected].