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Sen. Posey Aims to Revamp No-Fault Law: Sen. Bill Posey is Working on a Measure to Reform the State's No-Fault Auto Insurance Law

Aug 29, 2007

By Beatrice E. Garcia, The Miami Herald

Aug. 30--While there's still no plan to include any discussion of Florida's no-fault auto insurance when the Legislature meets next month in a special session, one more proposal to revamp the law is in the works.

Sen. Bill Posey, a Republican from Rockledge who has led the Senate Banking and Insurance Committee since the beginning of the year, is drafting a bill that's very similar to one he introduced during this year's regular legislative session.

The state Legislature is set to meet next month to work on budget cuts, but it could bring up auto insurance if the governor and legislative leaders add it to the agenda.

Last week, Rep. Ellyn Bogdanoff, R-Fort Lauderdale, put out an auto insurance proposal that has the backing of the House Republicans. That bill would cap attorneys' fees and would provide most of the medical benefits in hospitals' or doctors' offices after an accident.

The Bogdanoff proposal doesn't include a medical fee schedule.

But the bill Posey is working -- like the one the Senate insurance committee initially approved in April -- would include a medical fee schedule. It proposes covering most medical expenses, including doctor and hospital services, at 200 percent of the Medicare rate.

Capping fees is seen a way of attacking some of the fraud problems that many critics of the no-fault auto insurance say are prevalent.


The Posey bill also would cover care provided by healthcare clinics only if they are owned by licensed physicians and provide certain specialties.

This bill also would extend the no-fault law. The current draft has no expiration date.

Right now, the state law is set to expire Oct. 1.

The current no-fault statute requires drivers to purchase $10,000 of personal injury protection, known as PIP, which covers medical bills for a driver and passengers involved in an auto accident.

The medical bills are paid upfront, without assessing which the driver is at fault in causing the accident. The PIP coverage also includes benefits for lost wages and funerals.

Posey said he didn't believe a cap on attorneys' fees would be necessary because many of the disputes that end up in court are over medical fees and services. Limiting medical fees could eliminate a large number of disputes.


Posey notes that most of the remedies proposed by a state grand jury that investigated the problems with the no-fault system some seven years ago have been implemented, except for a fee schedule for medical services.

He adds that most other healthcare insurance systems, including workers compensation and many employer-provided plans, now include some form of fee and utilization controls. In the world of managed care for health insurance, doctors and other providers contract with insurers to provide services at discounted rates.

Posey also says eliminating the no-fault law will not eliminate all auto insurance fraud. "Not one single crook will go out and get a day job just because we get rid of PIP," said Posey.

The no-fault law also makes buying auto insurance in Florida mandatory. To register a car in Florida, drivers must buy a minimum of $10,000 in personal injury protection and $10,000 in property damage liability coverage that pays for damage to another person's car or property.

If a driver cancels his auto policy or lets it lapse, the Florida Department of Highway Safety and Motor Vehicles is notified by the insurer. A driver's license is canceled if there's no insurance.


A recent legal opinion from the DHSMV contends that property damage coverage would still be required for drivers to register vehicles and proof of that insurance would be required when drivers are involved in an accident. But otherwise, there is no real enforcement mechanism in the various laws the govern auto insurance on the state books right now.

Agents are worried that without a specific requirement for drivers to buy auto insurance, many wouldn't do it.

Gunars Mansons, a Fort Lauderdale agent who heads the Specialty Agents of Florida, said insurers won't be required to report when drivers cancel insurance and the state will have no way to track who has coverage and who doesn't.

The specialty agents group, which works with nonstandard auto insurers that normally provide coverage to less experienced drivers or ones with spotty records, is telling members to contact their lawmakers and urge them to extend the no-fault law beyond the sunset date.


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