Fla. Drivers Told Property Damage Liability Still Needed If No-Fault Expires

Florida drivers will still need to purchase property damage liability insurance even if the state’s no-fault insurance system disappears Oct. 1, a lawyer for the Department of Highway Safety and Motor Vehicles said.

But the department’s executive director questions whether the state will be able to enforce the law requiring the $10,000 minimum coverage.

“I would be concerned that we wouldn’t know whether or not someone had property damage insurance until an accident occurred and then it would be too late,” Electra Theodorides-Bustle said.

She is reviewing the opinion of Highway Safety and Motor Vehicles lawyer Michael Alderman on the property damage coverage. It is a reversal of a previous department opinion issued before Theodorides-Bustle was appointed in late February.

The opinion doesn’t address enforcement, an issue that concerns Theodorides-Bustle.

“Preliminary indications are that we will not be able to proactively enforce the property damage requirement in a similar manner that we’ve been enforcing” personal injury protection, Theodorides-Bustle said.

That could mean auto owners may not have to show proof of insurance when registering a vehicle and that the state wouldn’t be notified if they canceled coverage because that language is part of the no-fault law that’s expiring.

The law that requires motorists to purchase $10,000 in personal injury protection is set to expire Oct. 1 and it’s raised questions about other coverage required by the state. Insurance companies have pushed for an end to the no-fault law, saying the system is rife with fraud and abuse.

Hospitals, though, have been calling for lawmakers to continue the no-fault system because it ensures that they get paid after people get injured in accidents, rather than having to wait for lawsuits to be settled to determine blame.

Many, including Democratic lawmakers, are pushing for the issue to be resolved in a special session that begins Sept. 18 to make $1.5 billion in budget cuts. House and Senate leadership, though, have had different ideas on how to address the issue and have said they will not take it up unless there’s consensus.

House Republican leaders have offered a proposal, however, that would keep the PIP system, extending it until 2012. But it would change the way the system works in an effort to reduce opportunities for people to commit fraud.

The measure also would have the state give money to local agencies for additional fraud investigation and prosecution.

House Republican Whip Ellyn Bogdanoff, who led the effort to craft the legislation, said in a letter to all House members that “House leadership has always believed that keeping PIP as it exists today amounts to a legislative endorsement of fraud.

“Our approach preserves PIP, but eliminates as much fraud as possible from the system and protects consumers,” Bogdanoff, R-Fort Lauderdale, wrote.

Gov. Charlie Crist has said he supports the no-fault system, but doesn’t plan to force lawmakers to take up a bill unless there’s agreement.

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Associated Press writer David Royse contributed to this report.

Topics Fraud Legislation Personal Auto Property