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Budget-Cutting Special Session Cancelled: That Means PIP Likely to Expire Come October

Sep 7, 2007

By Alyson Crean, Florida Keys Keynoter, Marathon

Sep. 8--A special legislative session aimed at adjusting to a slower state economy was called off because House and Senate leaders were unable to compromise on cutting more than $1 billion from the state budget.

Legislators intended to meet Sept. 18 to cut the $71 billion state budget to match projected revenues, which could be $1.1 billion less than originally estimated.

In a Sept. 6 letter, Senate President Ken Pruitt and House Speaker Marco Rubio said they will call off the session, but will continue working on how to approach the projected shortfall. The letter also stated that they hope to call a budget-cutting session later in the fall.

The House and Senate approached the cuts differently, Rubio spokeswoman Jill Chamberlin said. The Senate is looking at cuts across-the-board while the House is looking at prioritizing spending cuts.

This month, House panels heard reports from state agencies that have been asked to cut as much as 10 percent from their budgets.

"No one actually expected that," Chamberlin said, adding that an estimated 4 percent rollback would cut spending $1 billion.

Florida's real estate slump has caused sales-tax collections to lag behind forecasts for the year.

Money in reserves could cover the shortfall, but legislators wanted to cut the budget this fall instead of waiting until the regular session in the spring.

The decision means that lawmakers are not likely to meet before the state's no-fault auto insurance coverage, known as Personal Injury Protection, expires Oct. 1. The law requires vehicle owners to carry a minimum $10,000 personal injury protection coverage.

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.

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 DMV 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.

Information from the Miami Herald supplemented this report.


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