Fla. No-Fault Sunset Now Seems Assured

An Oct. 1 expiration of Florida's no-fault auto insurance law now seems assured following a scheduling move Wednesday by the state's legislative leadership, according to an insurance trade group.

The comments of the American Insurance Association followed a letter from State Senate President Ken Pruitt, R-Port St. Lucie, and Assembly Speaker Marco Rubio, R-Miami, announcing that a special session to deal with the Florida state budget, originally targeted for Sept. 18, would not be held.

Groups urging that an extension or some substitute for no-fault be enacted have been asking the legislature to act on this issue Sept. 18.

But in a letter to members, Mr. Pruitt and Mr. Rubio wrote that the legislature will not meet then because, "the common denominator for productive special sessions is an initial agreement on a framework for action," adding that "while there has been tremendous progress, there is still work to be done. Therefore, we want to inform you that an official call setting Special Session has been placed on hold..."

The postponement "should ensure that the fraud-riddled no-fault law will sunset on Oct. 1," said the AIA.

On the same day that the leaders' letter went out, two hospital groups gave Florida Gov. Charlie Crist a letter arguing that the expected expiration of no-fault qualifies as a topic for the special legislative session on the budget because of the financial impact involved.

The no-fault sunset will add costs to Medicaid, courts, law enforcement, police pensions, the State Health Insurance Program, children's health care, and the Florida Department of Highway Safety and Motor Vehicles (DHSMV), according to the Florida Hospital Association (FHA) and the Safety Net Hospital Alliance of Florida (SNHAF).

If no-fault does expire, drivers will no longer be required to carry personal injury protection, but will have to carry property damage liability coverage, according to DHSMV.

Julie Pulliam, a spokesperson for AIA, said there will no doubt be some transition problems after no-fault sunsets, but AIA believes the concerns of those fighting to preserve it are "not fully valid."

She said forecasts that uninsured drivers will increase are "all speculation" and commented that most drivers carry uninsured motorist coverage.

Addressing predictions of increased litigation, Ms. Pulliam said that, "under Florida no-fault, we've had so many suits we don't think it will be any worse."

Currently, she said, organized fraud rings play "crash for cash," but with an end to no-fault and $10,000 in PIP coverage, "now you've got to prove who was at fault. You can't just say, 'I was injured,' submit the claim and get paid."

Cecil Pearce, AIA's vice president for the Southeast region, said in a statement that, "AIA's repeated efforts to reform Florida's no-fault system to return it to its original intent and rid it of fraud and waste were successfully blocked by special interests. AIA now believes that the only practical way to improve Florida's auto insurance system is to have the no-fault law go away."

"While there will certainly be a period of adjustment to a tort claims system after Oct. 1, insurers are committed to working with policyholders to educate them on the coverage options available to them going forward," said Mr. Pearce. "AIA believes the new system should be given adequate time to work. Once no-fault repeals on Oct. 1, massive consumer confusion would ensue if the legislative reinstitutes the law under the guise of reform."