Florida Set to Jettison No-fault Auto Insurance

Legislation is afoot to scrap Florida’s no-fault auto insurance system, according to Senate Banking and Insurance chairman Davis Simmons. In 2012, Florida passed a package of auto insurance reforms aimed at reducing fraud, but with those changes still tied up in court, many legislators want to do away with the system entirely.

“I’ve had several of our major insurance companies come to me and say that they are ready to move on, and that’s irrespective of a First District Court of Appeal Ruling,” Simmons said. “They’re saying that the system is broke, we acknowledge it’s broken, it’s difficult to fix the unfixable.”

Most observers expect the court fight to go all the way to the state Supreme Court – a process that could take years. The main legal challenge comes from a group of acupuncturists, chiropractors and massage therapists, who say the reforms reduce drivers’ access to the court system and unduly curtail medical coverage.

Leon County Circuit Judge Terry Lewis seems to agree: in a decision earlier this year, he blocked the main thrust of the reforms, arguing they prevented drivers from adequately pursuing damages through the court system.

“The reason for issuing the injunction was to protect the constitutional right and prevent the potential harm to citizens injured in auto accidents who, under the present PIP statute, may not receive necessary medical care,” Lewis wrote in his decision.

Backers of the reforms maintain that the current no-fault system, which requires motorists to carry $10,000 in medical coverage, is rife with fraud. Jeff Atwater, Florida’s CFO, says phony and inflated claims cost motorists as much as $1 billion a year in bloated premiums.

It’s a reality every Florida driver quickly comes to understand as he or she struggles to find cheap auto insurance.

The new top-to-bottom auto insurance overhaul is expected to come before a committee in the Florida Senate as soon as November.