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Special Session Could Save No-Fault Auto Insurance System

May 4, 2007

By The Palm Beach Post, Fla.

May 5--Florida's 37-year-old no-fault auto insurance system is scheduled to expire Oct. 1 because state lawmakers failed to reach agreement on how to change the system before the end of the regular legislative session Friday.

But no-fault, or some version of it, could still be revived.

GOP Gov. Charlie Crist said he was disappointed that the law would end and that it was likely no-fault would be taken up at a special legislative session on property tax reform that starts June 12.

The end of no-fault would mean lower auto insurance rates for many drivers because they would no longer be required to buy $10,000 worth of personal injury protection, or PIP, which pays the medical bills and lost wages of people injured in auto accidents and funeral costs for those killed.

The system's demise also would end restrictions that now prevent injured motorists from filing pain-and-suffering lawsuits against the at-fault driver unless a doctor or chiropractor certifies that the injury is permanent.

"This is a victory for consumers," said Chris Neal, a spokesman for State Farm Mutual Insurance Co., Florida's largest auto insurer.

But the Florida Hospital Association warned Friday evening that emergency-room trauma care could be jeopardized.

"The seriousness of this issue cannot be ignored," Wayne NeSmith, the association's president, said in a statement. ''Some hospitals may have to reconsider whether they can continue to operate their trauma centers, and that would be a tragic loss for the people of Florida.'' Hospitals are heavily dependent on reimbursements paid by auto insurers. Without no-fault, a person's health insurance would replace PIP as the primary payer of auto-accident medical treatment.

Auto insurers say they also plan to offer new optional medical coverage.

The legislature has been divided over what to do with no-fault and have heard conflicting views from dozens of lobbyists representing auto insurers, health insurers, medical groups and trial lawyers.

The Senate this week passed a bill that would extend the no-fault law until 2012 and would tell the state's Financial Services Department and Office of Insurance Regulation to use the extension to review the no-fault system and assess how it affects insurance rates, consumers, health-care providers and the trial court system.

The House made major changes to the Senate proposal, including limiting medical care to $10,000 for emergency care and $3,000 for outpatient care. But a divided House failed to take up the issue.

In 2000, a statewide grand jury concluded that the no-fault system was full of fraud and that a cottage industry of auto-accident medical clinics had developed.

After several years of debate, the legislature agreed in 2003 to let no-fault expire this year, with the idea that the pending disappearance would force legislators to write a new law. But even that threat was not enough to bring lawmakers together.

"We had been working for a number of weeks, trying to get everyone to buy into real reform, and there were some special-interest groups blocking it in the Senate," said Rep. Ellyn Bogdanoff, R-Fort Lauderdale.

"We'll see what happens when it sunsets. Maybe nothing happens," she said. "Maybe we can save Floridians a lot of money on their car insurance, and we can do our own Geico commercial." Sen. Jeff Atwater, R-North Palm Beach, predicted that the issue would be addressed during the special session.

"It allows everyone to take a deep breath, and allows the presiding officers to perhaps revisit the issue," he said.

By Kristi E. Swartz And Randy Diamond. Staff writer S.V. Date contributed to this story.

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