Fla. Special Session Postponed, Insurers Agree on Level of Confusion

A three-week Florida special legislative session scheduled to begin Sept. 18 has been postponed, meaning lawmakers will probably not act to halt the Oct. 1 expiration of a key no-fault auto insurance law.

The session was to focus on a variety of budget and finance issues, though many speculators predicted the pending expiration of personal injury protection (PIP) in automobile insurance policies would be hashed out as well – or at least placed on the session agenda.

Julie Pulliam, spokesperson for the American Insurance Association, said insurance companies have been preparing for the “sunsetting” of personal injury protection for months.

While noting that there is still time to reschedule the session prior to Oct. 1 – PIP’s expiration date – Pulliam said, “The postponement kind of clears the way for no-fault to sunset. At this point, there would be massive confusion for consumers and insurers if PIP did not expire.”

Industry groups agree that if the expiration were to be reversed at this stage in the game, it would create confusion for cunsumers and a lot of additional work for insurers and agents.

The whole situation surrounding PIP has also raised questions about what property damage coverage is required.

Jeff Grady, president of the Florida Association of Independent Agents said, “It’s a real pickle for agents.”

Grady said the biggest concern now is if property damage will be separated from PIP and remain as mandatory coverage. He said there have been some rumblings to that effect.

A lawyer for the state’s motor vehicles department recently said Florida drivers will still need to purchase property damage liability insurance even if the state’s no-fault insurance system disappears Oct. 1.

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

“Personal injury protection and property damage have always been parceled together,” Grady said. “It would be odd now to say that property damage might be considered more important than personal injury.”

Grady added that it is never too late for a rescheduling of the special session but admitted it is unlikely: “The fat lady is warming up,” he said.

Sam Miller, president of the Florida Insurance Council, said if the Legislature does not come back until October or November, PIP will expire – at least for a while, which he said is what Gov. Charlie Crist stated in media interviews.

“If they come back in late September, which is what we thought likely to happen, and there is an agreement, PIP is saved,” Miller said.

Miller added that it “seems pretty likely” now that PIP will go away and there will be some confusion for insurers, agents and consumers.
At some point a new auto insurance law will be passed, he said.

The bottom line, Miller said is that no one really knows how it will shake out – until legislation is passed or PIP dies a natural and uneventful death.

“It could be during a special session or the regular session next spring. If there is a lot of consumer uproar without PIP and a lot of problems, PIP might be reenacted after a hiatus in some form. If there is no confusion, PIP might be left dead and they might do some clarification of issues and, perhaps, mandate bodily injury liability. It is crazy and confusing right now,” according to Miller.

The special session was postponed because legislators failed to reach a consensus on several issues. The postponement prompted Gov. Crist to pen a letter of concern to House Speaker Mario Rubio and Senate President Ken Pruitt Thursday.

“Yesterday you informed me that the special session was being postponed due to a lack of an agreement between the Senate and House as to a framework for reductions,” Crist wrote. “As I expressed to you, this postponement is disappointing and I know you feel the same. The people of Florida expect us to act prudently to keep our fiscal house in order. I trust that a new date will be scheduled in the short term to do this important work.”

Topics Florida Carriers Property