Florida's No-Fault Auto Insurance Law Extended By State

By Linda Kleindienst, South Florida Sun-Sentinel

Sep. 21--TALLAHASSEE -- Florida's no-fault auto insurance law may be getting a second chance at life, but with beefed up protections against fraud.

Although set to expire on Oct. 1, legislative negotiators on Friday reached an agreement to extend -- likely by three months -- the current requirement that motorists carry a minimum of $10,000 in personal injury protection.

As of January, the no-fault law would be revamped, for the first time setting fee limits on what hospitals, doctors and clinics can charge for accident-related care and setting aside $2 million to prosecute fraud and provide better oversight by the Attorney General's office.

Put together under pressure from Gov. Charlie Crist's office, the deal must still be approved by legislative leaders and then ratified by the Florida Legislature. The state's lawmakers are set to go into a 10-day special budget cutting session on Oct. 3 but lawmakers could be called into a quick session next week, when many will already be in town for budget committee meetings.

Senate Banking and Insurance Chairman Bill Posey, R-Rockledge, said if his colleagues approve the changes it will, "mean rates will not continue to go up because of fraud or because PIP was abolished and replaced with more expensive insurance."

He laughingly compared the agreement to giving birth, saying, "It took about as long and was about as painful."

In what has been called one of the largest special interest food fights ever, the battle over how to revamp PIP has raged over the past year, pitting large insurance companies, small independent insurance companies and agents, trial attorneys, hospitals, doctors and medical clinics against each other.

The compromise was forged by Posey and Rep. Ellyn Bogdanoff, R-Fort Lauderdale.

It is the large insurance companies, led by State Farm, the state's largest auto insurer, that wanted to put an end to no-fault insurance. They claimed the system is rife with fraud, which jacks up the rates.

Under no-fault, insurance companies must pay medical benefits for their policyholders, no matter who caused an accident -- and that has opened the door to staged car crashes, false crash reports, contrived injuries and fraudulent billing. If no-fault were allowed to expire, drivers determined to be at fault would be responsible for the medical expenses of everyone involved.

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