Auto, home insurance reform fail in Legislature

Consumers hoping the Florida Legislature would agree on bills to slow rate increases for homeowner and auto insurance coverage will have to wait until next year.

The legislative session ended Sunday with two hotly disputed topics unresolved:

■ How to stop runaway home insurance rate increases stemming from third-party claims assignments and excessive litigation against property insurers.

■ Whether Florida’s decades-old, no-fault auto insurance system needs to be scrapped and replaced by a requirement that all drivers purchase liability coverage.

Both proposals failed to get out of the Senate following passage of related legislation by the full House of Representatives. But stalemates between senators loyal to either insurers or trial attorneys ensured neither made it to the governor’s desk.

By failing to act on reforms tied to “assignment of benefits” abuse by third-party contractors and plaintiff attorneys, “the Legislature just approved average rate increases of 15 percent to 30 percent for many Floridians — especially those in the tricounty, Tampa-area and Interstate 4 corridor counties,” said Dulce Suarez-Resnick, vice president of sales and marketing for NCF Insurance Associates, a Floridabased agency.

This year marked the fifth straight session that proposals to restrict claims abuses were left on the table, resulting in progressively larger rate increases.

Failure of the auto insurance reform bill followed a debate that was almost a mirror image of the property insurance fight.

The plaintiff attorney lobby pushed the bill to repeal the personal injury protection (PIP) mandate as a way to ensure atfault parties were held responsible for injuries caused in crashes, but insurers opposed it by saying it would lead to more lawsuits and higher rates for drivers.

A bill that passed the House would have dropped a requirement for all drivers to buy PIP insurance and instead require minimum coverage for at-fault coverage, which most drivers already buy. That would have resulted in savings for most drivers, according to a state-funded study. But a Senate version would have required drivers to buy additional coverage to cover emergency medical payments for their own injuries. Critics called that “PIP light” and said it would increase coverage costs for drivers who carry minimum coverage.

Ultimately, insurers demanded the bill also include restrictions on plaintiff attorneys’ ability to sue insurers for “bad faith violations,” which they said have become a cost driver much like one-way attorneys’ fees on the property side.

So in a reverse of the claims assignment fight, attorneys blame insurers for blocking reforms. “Florida drivers deserve a system that rewards responsibility,” Banfill said in a statement. “Instead, insurance corporations fought tooth and nail to protect the status quo.”

Insurers countered that the status quo is preferable. “We’re pleased the PIP legislation being pushed by [plaintiff attorneys] did not pass this session,” said Logan McFaddin, regional manager for the Property Casualty Insurers Association of America. The Senate bill “did not address fraud, bad-faith and other legal environment challenges. Had it passed, it would have wiped away years of cost-saving reforms and hurt Floridians.”