No-Fault Law is Revived, Reformed: The State's No-Fault Law Will Be Restored Jan. 1, but the Next Three Months Could Be Tricky for Florida Drivers

By Beatrice E. Garcia, The Miami Herald

Oct. 6--TALLAHASSEE -- Florida's no-fault auto-insurance law is coming back Jan. 1.

But some sections of the new law take effect as soon as Gov. Charlie Crist signs it, expected next week.

The final vote was smooth and quick Friday, despite months of negotiations and an expensive public relations campaign mounted by major insurers urging elimination of the controversial law. The bill restoring the no-fault system passed unanimously in the Senate and with four nay votes in the House.

But the next three months could be tricky for Florida's nearly 16 million drivers.

No-fault provisions of the new law kick in Jan. 1, and responsibility for accidents that happen until then will be decided by police on the scene or the courts.

Drivers whose auto insurance renews between Oct. 1 and year's end don't have to buy the required $10,000 of personal injury protection, or PIP, but they can opt for it if their insurers offer it.

When the new year starts, every driver will have to buy it.

Drivers whose six-month auto policies renewed before the law expired retain personal injury protection, and insurers will honor it if they're in an accident.

The advice for consumers from State Rep. Ellyn Bogdanoff, the Fort Lauderdale Republican who helped negotiate the new bill: Call your insurance agent; find out what your policy includes, and see what your insurer is offering.

"If you have an opportunity to buy PIP, you should do so. If you can't because your [insurer] doesn't offer it right now, buy additional coverages to protect yourself such as medical payments coverage and uninsured motorists coverage," Bogdanoff said.

Driver Peter O'Connell of Key Largo said he is glad the no-fault law will be restored but worries about the interim period, during which any accident could result in a lawsuit.

"It will be like going to Baghdad without a bulletproof vest," O'Connell said.

Jeff Grady, president of the Florida Association of Independent Agents, said most agents and their clients should be able to handle the weeks until Jan. 1 "because we know what the rules are."

But he joked that perhaps a bumper sticker -- "I Have PIP. Do You?" -- might be a way to clue in consumers to the benefits of purchasing PIP coverage.

Jack Sieling, who runs Fifth Avenue Insurance Agency in St. Petersburg, said when he explains the changes, most clients opt to buy PIP. "Other coverages could be more expensive, and they have to replace it in a few months anyhow."

But not all consumers are glad to see the PIP mandate return. Some had been looking forward to saving money on their premiums -- about $150 to $200 a year. Some drivers who have health insurance from an employer or buy it themselves see the coverage as redundant.

Bob Shields of Lakeland is among them. "I have sufficient coverage with my health carrier. I've paid PIP premiums for 30 years and never once used it or needed it."

To be sure, lawmakers who have struggled to reform the no-fault law since early last year are happy the work on this legislation is done.

"If we had a bill that was nothing but consumer friendly, we would not have had enough votes to pass it," said Sen. Bill Posey, the Rockledge Republican who crafted the bill with Bogdanoff.

This new law contains significant reforms, including a fee schedule to control costs of medical care. Also, services must be provided by licensed physicians, dentists, chiropractors and osteopathic physicians, and treatment clinics must be owned by licensed specialists.

While an 11th-hour attempt to include limits on attorneys' fees was thwarted, the bill includes several measures that could curtail lawsuits. For instance, claims from the same provider for the same accident victim could be bundled.

Posey also explained that because many of the lawsuits spring from disputes over what insurers should pay for medical services, the fee schedule could eliminate many of those problems.

Insurers' take on the new law is mixed.

"We'll have to see how the reforms we have now will play," said George Grawe, general counsel for Allstate Floridian Insurance, which was rooting for elimination of the PIP law.

He acknowledged, however, that the law passed Friday does include medical fee limits and some controls on litigation, two measures insurers have said were needed to reduce the fraud that has plagued the PIP system. They claim staged accidents and claims for unneeded services were often used to collect the $10,000 in medical benefits.

Floridians for Lower Insurance Costs, a quasi-consumer group funded primarily by State Farm and Allstate, said the bill failed to fix major flaws in the system and would lead to higher auto rates.

Hospitals and doctors who worried about having to treat accident victims without insurance are thrilled PIP benefits will be restored.

"Lawmakers on both sides of the aisle recognize that no-fault insurance, with $10,000 in mandatory personal injury protection, is an important consumer protection and safety net for Florida's drivers," said Wayne NeSmith, president of the Florida Hospital Association.

Miami Herald staff writer Marc Caputo contributed to this report.

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