Study: Escambia Drivers Could Save In No-Fault Elimination

September 15, 2016

Eliminating the state’s no-fault auto insurance system could save the average Escambia County motorists about $39 a year per car, according to a study released Wednesday by the state.
The $125,000 study by Illinois-based Pinnacle Actuarial Resources Inc. also found that premiums on personal-injury protection insurance coverage, also known as no-fault, dropped 15.1 percent statewide following a 2012 legislative effort to reduce fraud in the system.

However, the premium reduction is nearly 10 percent less than targeted for consumers. And the Pinnacle actuaries found that since 2014 there has been “a small erosion in the cost savings from this legislation.”

The study, commissioned by the state Office of Insurance Regulation in advance of the 2017 legislative session, doesn’t offer recommendations. A spokeswoman for the office said it is “carefully reviewing the results.”

The findings come as critics contend the 2012 reform attempt has failed to meet expectations and that bodily-injury coverage, which most motorists in Florida already have, should be a replacement for no-fault coverage.

The study, which used state records and data from six of the top auto insurers in Florida, projected that eliminating no-fault would save $272 a year per vehicle for motorists in Miami-Dade County.  The savings would be $28 in Brevard County, $105 in Orange County, $130 in Broward County, $97 in Hillsborough County and $47 in Duval County.

Ashley Carr, a spokeswoman for state Chief Financial Officer Jeff Atwater, said the CFO’s office will need to thoroughly review the 416-page report “before any thoughts about possible recommendations can take place.”

Atwater, who along with Gov. Rick Scott backed the 2012 reform effort, last year said repeal of no-fault may be needed if consumers aren’t getting the intended relief.

Bills calling for the repeal of no-fault in the 2016 session (SB 1112 and HB 997) didn’t advance out of their first committees.

The insurance industry may not be ready to give up on no-fault, which was designed to streamline payments to injured people and reduce the need for lawsuits after accidents.

Logan McFaddin, regional manager for the Property Casualty Insurers Association of America, said the study indicates the 2012 reforms have reduced fraud while providing cost savings to Florida motorists. He added that the association, which represents numerous insurers, is open to talk about additional reforms.

“While PCI (the association) and our members are still reviewing the results of the study, so far we are pleased with the results,” McFaddin said in a statement. “Evidence shows PIP reforms enacted in 2012 continue to reduce fraud and abuse, protecting the hard earned premium dollars of the citizens of Florida. PCI and our members, however, are always willing to consider additional reforms to continue to reduce fraud and protect our policyholders.”

Under the decades-old no-fault system, motorists are required to carry personal-injury protection coverage that includes $10,000 in medical benefits.

The 2012 legislation (HB 119), aimed at reducing fraud, included capping non-emergency care at $2,500 and requiring people seeking PIP medical benefits to receive initial care within 14 days of accidents.

In advancing the law, state officials claimed the number of no-fault claims had increased 28 percent from 2006 to 2010, with the dollars paid by insurers in that time growing 66 percent, from about $1.5 billion to $2.5 billion.

by Jim Turner, The News Service of Florida file photos.


13 Responses to “Study: Escambia Drivers Could Save In No-Fault Elimination”

  1. Jim on September 19th, 2016 6:03 pm

    Florida should pass law that prohibits any person that is in an accident and who did not have mandatory insurance coverage in accordance with state statues, from filing any claims or lawsuits against the other party. Regardless of who is at fault. Reason being? Because if you don’t play by the rules, you forfeit your right to seek your right to be made whole. That will bring every drivers premiums down who do play buy the rules. want to sue someone? Play by the rules or stay off the roads.

  2. Jason on September 16th, 2016 6:33 am

    Henry —– Florida law (324.021) requires residents to have car insurance that provides minimum coverage amounts for both personal injury protection (PIP) insurance and property damage liability (PDL) car insurance.

    There are two optional types of coverage known as Comprehensive coverage and Collision coverage . Generally, when consumers have purchased both the minimally required “Liability and PIP” plus “Comprehensive and Collision” it is deemed they have purchased “full coverage”. However, I will agree that a consumer who limits themselves to just the aforementioned types of insurance, won’t truly have “full coverage” as there are many “options” available for insurance. These options include:
    Uninsured or Underinsured Motorist; Rental Car reimbursement; Towing reimbursement; Lock out service; or coverage for non-OEM equipment such as high-end radio and speakers or body moldings.

    A short description of each type of insurance is noted as follows:
    Liability: When an accident is your fault, bodily injury liability covers expenses related to the injury or death of another driver or a pedestrian, and property damage liability covers expenses related to the damage of another person’s property.

    Personal injury protection: If you and/or your passengers are hurt in an accident, this can help cover medical expenses plus related expenses like income continuation.

    Collision: Covers expenses related to the damage or destruction of your vehicle that’s been in an accident.

    Comprehensive: Covers expenses related to the damage or destruction of your vehicle in situations like thefts or storms.

    Uninsured & underinsured motorist: Covers medical expenses and/or repair bills if you’re in an accident, the other driver is at fault and doesn’t have any (or doesn’t have enough) insurance.

  3. Henry Coe on September 15th, 2016 8:27 pm

    Jason, Thanks for you post and comments. re: to your ie: Comprehensive is part of having full coverage, but having comp does not mean you have full coverage. i.e. I carry Comp, but I don’t have full coverage.
    I’m sure if someone has a vehicle that is financed, their loan company would like force them to carry full coverage. That’s totally a guess on my part. I’ve never bought a new car and financed it. I like em’ old and paid for. :-)

  4. Jason on September 15th, 2016 2:33 pm

    Florida has a legal statute that mandates the deductible for windshield repair or replacement be waived when a person has comprehensive (ie Full Coverage) auto policy.

    627.7288 Comprehensive coverage; deductible not to apply to motor vehicle glass.—The deductible provisions of any policy of motor vehicle insurance, delivered or issued in this state by an authorized insurer, providing comprehensive coverage or combined additional coverage shall not be applicable to damage to the windshield of any motor vehicle covered under such policy.

    History.—s. 1, ch. 79-241; s. 2, ch. 81-318; ss. 547, 563, 809(2nd), ch. 82-243; s. 79, ch. 82-386; s. 15, ch. 90-119; s. 114, ch. 92-318; s. 5, ch. 97-178.
    Note.—Former s. 627.7378.

    Florida’s “no-fault” coverage requirements (FS 627.736) mandates personal injury protection to the named insured, relatives residing in the same household, persons operating the insured motor vehicle, passengers in the motor vehicle, and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a self-propelled vehicle, subject to subsection (2) and paragraph (4)(e), to a limit of $10,000 in medical and disability benefits and $5,000 in death benefits resulting from bodily injury, sickness, disease, or death arising out of the ownership, maintenance, or use of a motor vehicle.

    Any change in “no fault” personal injury mandates will not affect comprehensive coverage for windshield damages. Two totally separate animals.

    With that said, IMHO, the estimated 4.3% projected savings each year may not be worth the risk of totally eliminating the mandated “no fault” coverage.

  5. Henry Coe on September 15th, 2016 11:21 am

    With Florida being a “No Fault” state, your Windshield only claims will not cause your rates to increase no matter how many Windshield only claims you make. If the “No Fault” rule is done away with, Insurance might be able to allow Windshield claim to count against your rate?

  6. Henry Coe on September 15th, 2016 11:16 am

    Fisherman – It sounds like the insurance agent was scamming you into buying Full Coverage. You only have to have Comprehensive on your policy to cover a Windshield and in Florida, for a Florida Policy holder, you don’t have to pay the deductible for a Windshield Only Comp claim.

  7. Henry Coe on September 15th, 2016 11:09 am

    It is a Comp Claim for a windshield replacement. I worked in the Windshield business for 10 years and my understanding of why a deductible was waived in Florida for a Windshield only claim is because of Florida being a “NoFault” state.

  8. A Alex on September 15th, 2016 10:49 am

    I dont understand why my insurance pays for my hospital billswhen it wasnt my fault. Better than $10,000 worth, more than my last 6 years of premiums with this company.

  9. fisherman on September 15th, 2016 8:17 am

    Thank you for clearing that up. That is what I meant you need collision coverage to get the windshield.

  10. William on September 15th, 2016 7:40 am

    >>If we get rid of “No Fault”, your deductible will no longer be waived if you have to file a Windshield claim.

    I recently filed an insurance claim for a broken windshield in Florida. Agent said it was a comprehensive claim.

  11. FURIOUS AND BROKE... on September 15th, 2016 7:31 am

    I was injured in 3 back to back auto accidents. I suffered legitimate back, neck and shoulder injuries. It was necessary to file PIP claims for these injuries. As a result, my insurance was canceled and I was forced under Florida’s No Fault Statute to obtain FAJUA (Florida Automobile Joint Underwriters Association) Insurance. I must keep this insurance for approximately 7 years from the date of the first accident which was in 2013. This insurance is costing me $4700.00 per year. You must keep in mind that in each of the accidents, I was NOT AT FAULT, the OTHER DRIVER WAS TICKETED. I myself have not had a traffic ticket in at least 15 years. My insurance for my truck and boat prior to the accidents was just shy of $1000/year. This system needs some very serious re-vamping in my very humble opinion.

  12. fisherman on September 15th, 2016 7:25 am

    No fault hasn’t anything to do with the windshield replacement. You need 100% full coverage for the windshield protection. Now I may be wrong but that is what one insurance agent told me.

  13. Henry Coe on September 15th, 2016 5:11 am

    If we get rid of “No Fault”, your deductible will no longer be waived if you have to file a Windshield claim.
    There are likely many ramifications to a change like this that we should spend a long time talking about before we change anything.

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