In a 2016 report, the OIR said “5.6 percent savings would be realized in the statewide average premium charge” by replacing no-fault with “minimum security requirements” of $25,000/$50,000.
In 2018, however, the actuarial firm Milliman Inc. determined during an assessment of a similar bill for the Property & Casualty Insurers Association of America that repealing PIP and mandating coverage of at least $25,000/$50,000 would increase the statewide average premium charge by $67, or 5.3 percent.
For drivers who currently purchase only PIP and property damage at the minimum mandatory limits, Milliman estimates premiums would increase by an average of $230, or 50.1 percent.
“This is a more efficient system,” Lee said. “It is not perfect, but there’s a reason we’re one of only a couple of states in the nation that don’t require a mandatory bodily injury system.”
But Sen. Jeff Brandes, R-St. Petersburg, said SB 1052 wouldn’t protect insurance companies against dubious claims filed in “bad faith” by trial lawyers.
“This conversion [from PIP to minimum security requirements] needs to happen. Everybody agrees it needs to happen,” Brandes said. ”But in the absence of addressing third-party ‘bad faith’ before we pass PIP repeal, we will go years and years before that issue ultimately gets addressed. I think it is one of the major issues the Legislature needs to address.”
Sens. Doug Broxson, R-Gulf Breeze, and Keith Perry, R-Gainesville, joined Brandes in voting against the measure.
Brandes has filed his own PIP repeal bill, SB 896, the “Responsible Roadways Act,” which calls for eliminating the no-fault system by Jan. 1, 2021, but includes a provision “providing that, under certain third-party claims, a motor vehicle liability insurer is not liable beyond available policy limits if it meets certain conditions.”
SB 896 was filed Feb. 8 and referred to Infrastructure & Security, Banking & Insurance and Appropriations committees but has not been heard.
Lee said “bad-faith reform” would help insurance providers but, in this instance, such laws could backfire by leaving policyholders vulnerable to third-party lawsuits.
SB 1052 “totally rewrites the fundamental premise of the insurance policy, which is that the insurance company has a level of sophistication and the wherewithal to defend the insured,” he said.
Lee said Brandes made good points, however, and a “bad faith” provision such as the one in SB 896 “could be written in a way that is fair to consumers and doesn’t leave them hanging.”