AUTO NO-FAULT: “…and here we are again!”

I’m often critical of the Palm Beach Post. And, for good reason.

But…just because it far too often “gets it wrong” on property insurance, doesn’t mean I shouldn’t recognize when it gets it right on auto insurance.

How timely it was for the Post to publish, only two days after the elections, an editorial titled “Abolish Florida’s no-fault insurance system.”

After all, a growing number of lawmakers may now be open to repeal. The polls are closed and the huge constituencies feeding off the status quo will feel less intrusive–a powerful array, including: auto insurers, hospitals, trial lawyers, health insurers, chiropractors, health clinics, massage therapists, doctors, acupuncturists, et al.  And, a media often misled by their rhetoric; all except, apparently, the Palm Beach Post.

The PIP system has created a huge incentive for fraud. Unscrupulous chiropractors, lawyers and fake victims conspire to charge insurers for unneeded medical services. When investigators look into their claims, they often find everything was faked–from the crash to the chiropractor or doctor to the office where the treatment was supposed to have happened.”

The week before the editorial, CFO Atwater’s Division of Insurance Fraud (DIF) rounded up yet another ring of crooks exploiting PIP’s mandatory pay provision. And, just prior to the elections, Atwater said of the 2012 reforms he was willing to give it only“…one more try”, adding…

“I couldn’t see trying to reform it anymore”.

The CFO and Governor have done what they promised, reformed instead of repealed PIP. And because massage therapists and acupuncturists were carved out of the pie and chiropractors get a smaller slice, and non-emergency PIP payouts were reduced from $10,000 to $2500 fraud has ticked down. (See NOTE# 1 below).

But, prices aren’t going down as promised and fraud is creeping up, again! Over half of the top writers have increased their overall rates since the law passed. (See NOTE#2 below)

And we all know why.  The 2012 legislature blinked “watering down” reforms with SB-1860 instead of giving consumers what they needed in CS/HB-119. I, and many others favoring outright repeal predicted fraud (and thus rates) would not materially drop, in the long run, as a result.

If it was to be the best lawmakers could muster, I said…

Isn’t Florida better off without PIP or even no mandatory insurance at all, than it is with a mandatory purchase of only $10,000 of coverage that continues to reward accident fakers and, as CFO Atwater called them, ‘…a circling pool of vicious sharks’?”

But, let’s be frank.  Watering down laws isn’t the sole purview of lawmakers. For four decades trial lawyers have adeptly applied the concept in court. (See NOTE #3 below).  And so…it now looks like the watered-down reforms will be completely watered down once again.

Prior failed challenges to the 2012 reforms were filed in Tallahassee by acupuncturists, massage therapists and chiropractors. Lack of standing was an issue. But, in late July South Florida lawyers found a less-than-satisfied PIP claimant with unpaid medical expenses which,  according to the pleadings, renders the 2012 reforms unconstitutional. Benefits are so diminished, they argue, that the entire concept of curtailing access to the courts in exchange for automatic payment has completely collapsed.

Don’t know if they’re right.  And don’t care!

I do know if the reforms get tossed PIP rates would need to increase as they were doing in the absence of those reforms.  Just as they’ve done under every set of reforms since the original law passed four decades ago.  ,

Like Senator David Simmons (R-Altamonte Springs), the previous Chairman of the Senate Banking & Insurance Committee, said…

“We’ve had 40 years of fixes trying to resolve the PIP problem and here we are again!”


NOTE #1: For more details on the anti-fraud provisions in the 2012 reforms see “Important Changes to Florida’s PIP Law” by Michael S. Walsh. Anyone with information of suspected insurance fraud is asked to call 1-800-378-0445. Citizens who provide tips can remain anonymous. The Department of Financial Services to date has awarded almost $349,000 to nearly 60 citizens as part of its Anti-Fraud Reward Program. The program rewards individuals up to $25,000 for information that directly leads to an arrest and conviction in an insurance fraud scheme.

NOTE #2: PIP rates went down 13.2 percent at the state’s top 20 auto insurers since the 2012 changes, but that was below a 25 percent target under the law and 12 of the 20 raised overall rates. PIP can represent about 20 percent of the total bill. 

NOTE #3: For all my previous PIP posts including links to valuable statistics and studies enter “PIP” in the search box on the Home Page at For government studies, other documents and presentations on PIP open the “Library Tab” and choose “Miscellaneous Documents.”

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