'No No-Fault' Zone Ahead for Drivers: Florida's No-Fault Auto Insurance Law Expires Today, and Chances to Extend the Measure Now Look Dim

By Beatrice E. Garcia, The Miami Herald

Oct. 1--For Florida drivers, a new era is here.

After 36 years with a no-fault auto insurance system -- where most medical expenses for accident victims are paid up front without deciding which driver caused the accident -- the law expired at 12:01 a.m. today.

Unless the Legislature acts during a 10-day special session that begins Wednesday, all accidents -- even a small fender bender -- could end up in court to determine who caused it. But chances for action are dim because lawmakers need to focus on balancing the state budget, a requirement mandated by the state Constitution.

The next opportunity to restore and revamp the no-fault system most likely would be during the regular legislative session in spring, although a special session later this year has also been mentioned as a possibility.

For now, drivers will no longer be required to buy $10,000 of personal injury protection, or PIP. Property damage coverage will still be needed to register a vehicle in Florida. But the mechanism to enforce this requirement will die with the no-fault law.

Several major insurers, including Allstate and State Farm, contend PIP isn't needed if drivers already have health insurance. That way consumers could save some $200 on auto insurance costs.

Some drivers like Marie Dahl of Cutler Bay are pleased. She and her husband have health insurance and are on Medicare.

"My husband and I resent the fact that we are forced to purchase PIP insurance when we don't need it," she says.

But others disagree.

"No-fault protects us all. It covers property damage and injury. Without it, we are all at risk from uninsured drivers unless we carry coverage that protects us," says Jack Edwards.

The no-fault law didn't sunset without some last-minute legislative maneuvering. Last week, negotiators in the Senate and the House of Representatives had ironed out a proposal that would extend the no-fault law and provide limits on medical costs and would add more money for fighting insurance fraud. Sen. Bill Posey, R-Rockledge, and Rep. Ellyn Bogdanoff, R-Fort Lauderdale, led the effort.

But Friday afternoon, when it came time to set the agenda for this week's session, auto insurance wasn't on it. Senate President Ken Pruitt, along with House Speaker Marco Rubio, R-Miami, believed that lawmakers needed to focus on balancing the budget. But in a letter to Gov. Charlie Crist, Rubio urged that the auto insurance issue be added to the session agenda as well.

'GOOD PLAN'

"We had a good plan," says Posey. "We're ready to take a shot at passing it whenever we can. We never had House and Senate leaders agree before" on reform measures.

"I would rather have tried and failed than to give up," says Bogdanoff.

She sent Crist a letter asking the governor to at least issue an emergency rule to preserve the enforcement mechanism in the no-fault law. The statute requires insurers to notify the Department of Highway Safety and Motor Vehicles as soon as an insurance policy lapses or is canceled. DHSMV then suspends a driver's license until the insurance is restored.

Without the no-fault law, state officials will have no way of knowing whether drivers maintain the still-required property damage liability coverage after a car is registered.

A workshop in the Senate Banking and Insurance Committee is set for Tuesday afternoon to discuss the bill drafted by Posey and Bogdanoff, along with input from special interest groups such as healthcare providers, lawyers, agents and insurers that have a stake in the battle to save the no-fault system.

"We've worked tirelessly over the past several months and weeks to produce a compromise proposal that addresses the fraud in the system and produces the necessary consumer protections," says Rep. Adam Hasner, a Delray Beach Republican.

Insurers have argued for years that the mandatory coverage leads to fraud. Because the coverage included no fee schedules or utilization controls, unscrupulous doctors and clinics easily ran up medical bills for many accident victims to use up the mandatory $10,000 in coverage.

State Farm lobbyist Mark Delegal didn't return phone calls Sunday requesting comment. But late last week, State Farm sent letters to policyholders urging them to write their lawmakers and ask them not to approve the "last ditch effort being made in Tallahassee to reinstate our broken no-fault (PIP) system."

Hospitals and doctors have been adamant that PIP be retained because they fear being left with unpaid medical bills from drivers with no health insurance. U.S. Census Bureau data shows that 20 percent of Floridians don't have health insurance.

Without PIP, "the consumer loses accessibility to quality healthcare at an affordable price," said Dr. Joshua Smith of Jupiter.

In the end, politics played a key role in the battle over whether to scrap the no-fault system or reform it.

In the past two years, the House has leaned toward measures to control excessive billing and fraud.

The most recent attempt at reform by Posey and Bogdanoff included fee limits and measures to curb potential abuses from clinics not owned by physicians as well as pumping in $2 million to fight fraud. It retained the basic PIP requirement, which provides the medical coverage as well as some lost wages and funeral benefits. The proposal would have capped attorneys fees as well.

The Senate has been less inclined to pass stiff reforms for PIP requirements.

During the regular session this year, Posey introduced a bill to revamp the no-fault law that included a medical fee schedule and extra money to fight fraud. But the bill was stripped of all the tougher measures in the Senate General Government Appropriations Committee, chaired by Sen. J.D. Alexander, R-Lake Wales. State Farm's Florida headquarters are in Alexander's district.

BILL VETOED

Last year, another bill met a similar fate. It did get approvals in both the House and Senate, but was vetoed by then-Gov. Jeb Bush because it did nothing to eliminate some of the perceived problems with the no-fault system.

Even now, a battle might have been brewing among state senators.

Last Thursday, after the Senate and House leaders hashed out their no-fault proposals, Alexander and Sen. Dave Aronberg, D-Greenacres, unveiled a no-fault bill that would have required mandatory bodily injury coverage -- which pays medical bills for the other driver if you're at fault -- rather than the PIP requirement.

Miami Herald writers Mary Ellen Klas and Marc Caputo contributed to this report.

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