Uninsured Auto Crisis Foreseen For Florida

An insurance company chief executive has written Florida legislators warning them that the state will be facing an uninsured driver crisis if they permit the state's no-fault auto insurance law to expire Oct. 1.

“Legions of lower income Floridians will opt not to buy auto insurance of any kind because they are no longer obligated to do so by state law,” predicted Glenn W. Anderson, the president and CEO Dallas-based of Gainsco, in his letter to all Florida legislators.

“I implore you to act upon this matter quickly by incorporating it into the upcoming Special Session. It is distressing that it has not yet been included in the session's agenda,” he wrote the lawmakers.

Florida's Chief Financial Officer Alex Sink has already posted information on her Web site explaining what the legal change will mean for consumers.

Mr. Anderson, whose firm provides coverage for high risk and poor credit drivers, said in his letter that according to communications from the Florida Division of Motor Vehicles, once the Personal Injury Protection law sunsets it will be possible to obtain license plates without proof of insurance. “Uninsured motorist losses will rapidly escalate,” he predicted.

Mr. Anderson added that for legislators to expect that the 2008 legislature “or some future court ruling will save the day seems to be a high-risk bet for the amount of damage that is likely to occur in the meantime.”

Insurers who see things differently from Mr. Anderson–and favor seeing the law expire–have predicted that there will be a double-digit rate decreases.

But Michael Johnston, president of the Gainsco's southeast region said in an interview today, “We assert with passion” that those insurers' rate filings “aren't telling the full story.”

For many consumers, he said, the decrease will be more like 6 percent and will be accompanied by far less coverage, and for some there may actually be a rate increase.

Lisa Miller, a spokesperson for Gainsco, said one insurer will now ask customers to opt in if they wish to have their coverage to include payments for medical treatment.

Mr. Johnston said, “There are 12 million cars registered in Florida; it is estimated over 4 million will be driving without insurance in the future. That is a frightening statistic and one that can be avoided if the Legislature will address the issue in the September 18 special session.”

Lisa Miller, a Gainsco spokesperson, said the only response to Mr. Anderson's writing so far has been a letter from an aide to Gov Charlie Crist, who wrote that the governor is continuing “to gather information and evaluate the options relating to automobile insurance in Florida.”

The letter from Kate McIlroy in the governor's office of policy and budget said Gov. Crist is “committed to ensuring that Florida's citizens are financially prepared and protected.”

In response to a request for information concerning possible upcoming legislative activity to address the sunset of no-fault insurance, Jill Chamberlin, a spokesperson for the office of House Speaker Rep. Marco Rubio, R-West Miami e-mailed that, “The Speaker and the Senate President have said the Sept.18 special session will be devoted to state budget cuts. Speaker has said he would prefer mandatory coverage BUT only if the system is reformed to end fraud.”