Florida No-Fault/PIP Survives!

Attached is the newly released House bill on PIP reform passed by both houses of the legislature on Friday, October 5th, 2007, House Bill 13c.  After all the years of haggling, debating, etc, there really are not a whole lot of changes.  The delay in getting the new bill approved actually created more problems than it solved. Just ask underwriting.

The current No-Fault Law will be brought back to life on January 1st, 2008 with several notable changes PLUS the repeal of 627.736(9)(a), a section that required a 45-day notice of cancellation to the Department of Highway Safety.  Some courts had held that this section precluded insurers from cancelling or voiding the policy “ab initio” (i.e. from the beginning), such as in cases of material misrepresentation.

Here is a summary of some of the most notable changes that will take effect on January 1st, 2008:

• There will be, in essence, a fee schedule for all services, with some "U&C".  Depending on the type of service, it may be 200% of Medicare part A or B, 75% of the usual and customary charge, or the usual and customary charge in the community.

• If a fee schedule is applicable for a particular service, the rate is for the Medicare fee schedule in place at the time the service was rendered.  {No more issues with adjusting for the CPI}.

• Insurers must reserve $5000 of the applicable coverage amount for emergency and hospital services for 30 days after the insurer gets notice of the accident.   {Get ready for lawsuits over what is considered notice}.   The due date for payment of benefits of other providers is tolled during this required "hold" period.

• There is a list of specified medical providers whose services are compensable under No-Fault coverage.

• Instead of 15 days, an insurer now has 30 days to pay a claim in response to a demand letter.

• Failure to pay valid claims with "such a frequency so as to indicate a general business practice" is a prohibited unfair or deceptive practice.

• Suits by the same provider must be brought in one suit.  If the judge determines that a suit by a provider should have been brought in a prior suit, the judge "may not" award fees.

• Drivers will continue to be able to lower their premiums by purchasing deductibles.

For some drivers, e.g. those who get into auto accidents between October 1st, 2007 and December 31st, 2007, the confusion may continue. “At fault” drivers will not be immune from lawsuit if they hit another driver until the PIP system kicks back in next year -- with only one exception: if both plaintiff and defendant have no-fault, then the no-fault tort exemptions will apply to them. While this sounds serious, it may not cause much more than a minor blip in the handling of PIP and Auto BI claims.

For a thorough look at the Evolution of Florida’s No-Fault/PIP Law, from its inception to it’s death, and ultimately, its resurrection, the PCCP has a 1 CE-Hour Online course available now at the promotional rate of $20.00 (a $5.00 discount).  Just click here.