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Auto Insurance: Optional?: When the State's Controversial No-Fault Law Expires in October, There May Also Be No Requirement for Drivers to Carry Insurance

May 17, 2007

By Beatrice E. Garcia, The Miami Herald

May 18--After Oct. 1, Florida drivers will no longer be required to carry auto insurance.

That's the unintended consequence of lawmakers' inaction during the regular legislative session that ended two weeks ago.

The state's controversial no-fault law, which requires drivers to buy at least $10,000 in personal injury protection, or PIP, and $25,000 in property damage liability, is set to expire because lawmakers failed to extend it or replace it with another insurance requirement.

The Senate passed a bill that would have extended the no-fault law for four years, but it was never taken up in the House of Representatives. The House also didn't consider a bill replacing PIP with a form of mandatory medical payments coverage. That bill surfaced less than two weeks before the session ended.

While rumors continue in Tallahassee that legislators could take up the auto insurance issue during the June special session the governor has called to tackle property tax reform, there has been no action as yet to put the no-fault law on that agenda.

Calls and e-mails to Gov. Charlie Crist and House Speaker Marco Rubio weren't returned late Thursday.

Lawyers and doctors who work with accident victims are shocked at the prospect that lawmakers would let the no-fault law die without any action, especially since required insurance coverage would disappear.

"It will be like practicing in the wild, wild west," said Dr. Stephen Greenberg, an orthopedic surgeon in Fort Lauderdale.

He said about 30 percent to 40 percent of the patients he now sees are accident victims, many of whom pay for his medical services with the PIP insurance required by the no-fault law.

DOCTORS RELUCTANT

Greenberg said he would be reluctant to be called to emergency room if he's not certain there's any insurance to cover medical bills.

Right now, proof a driver has purchased PIP and property damage coverage are required to register a vehicle in Florida. Drivers can be ticketed if they don't have insurance.

But in an e-mail sent to an insurance agent, an official with the Florida Department of Highway Safety and Motor Vehicles said once the no-fault law expires there would be "no mandatory insurance for the purpose of obtaining a vehicle registration."

Steven Fielder, a legislative affairs representative for the Department of Highway Safety and Motor Vehicles, was answering questions posed by Gunars Mansons, who runs American Insurance Agency in Fort Lauderdale. Mansons also heads a non-profit group of agents that work with non-standard auto insurers -- companies that generally provide insurance for drivers with bad credit or faulty driving records.

WHAT'S THE IMPACT?

Mansons and many others in the auto insurance market right now are trying to figure out the impact on drivers, agents and insurers after no-fault expires.

Mansons and others are worried about the consequences in South Florida where there are already a high number of drivers who carry only minimum coverages because that's all they can afford. They fear such drivers won't buy coverage at all if it isn't required. Many also don't have health insurance.

LESS EXPENSIVE?

With insurers such as State Farm and Allstate, which have lobbied hard to convince lawmakers that PIP is expensive and unneeded coverage, drivers can still buy medical payments coverage after Oct. 1. They contend this coverage would be less expensive than PIP.

But attorneys like Cris E. Boyar in Margate believe responsible drivers will end up paying far more for auto insurance as they add more coverage to protect themselves against uninsured drivers.

'THE LAW PROVIDES'

"If there's an accident now, the law provides $10,000 in medical expenses and lost wages. You don't need a lawyer to collect that," said Boyar. "But without PIP, most accident victims will need lawyers to collect and it would cost [them] 30 percent to 40 percent in contingency fees."

PIP pays for 80 percent of medical bills up to $10,000 per driver and each passenger in a car involved in an accident. Property damage insurance covers damage to another person's home, car, or other property because of an accident. The coverage also provides lost wages and death benefits.

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Copyright (c) 2007, The Miami Herald

Distributed by McClatchy-Tribune Information Services.

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