Posted: 3/13/2007

NAMIC Cautions Against Keeping No-Fault Auto Insurance

TALLAHASSEE (March 13, 2007) - The National Association of Mutual Insurance Companies (NAMIC) spoke out against Florida's no-fault auto insurance system. Liz Reynolds, NAMIC state affairs manager for the Southeastern region, addressed reporters and others gathered at the statehouse today.

"It is clear that the no-fault system isn't working in Florida due to fraud, waste, and abuse," Reynolds said. "That's why NAMIC strongly supports the no-fault sunset."

The state's no-fault system was enacted in the mid-1970s and requires those injured in automobile accidents to pay for their own injuries, regardless of who is at fault. But the system has resulted in Florida having some of the highest insurance rates in the country, with the average family paying about $250 more for auto insurance than it should.

Rather than taking care of medical bills for injured motorists, Florida's no-fault insurance:

• Forces drivers to pay 20 percent of their medical expense in an auto accident up to $2000 even when the accident wasn't their fault. This drives-up insurance rates for good drivers.
• Results in drivers with health insurance paying for coverage twice over.
• Allows unscrupulous chiropractors to charge the no-fault system twice what they charge others for the same services.
• Permits personal injury lawyers to game the system, filing lawsuits over trivial disputes in order to rack-up large attorney fees.
• Adds up to millions of extra dollars every year - costs paid by all of us in our insurance rates.

The system will expire in October, paving the way for Florida to join 38 other states with a tort-based system, where those responsible for accidents are also financially accountable for the resulting injuries.

While there have been some calls to reform the current system, the Legislature should be wary of them.

"Once debate gets underway, reform proposals are likely to be watered down, making real reform impossible."

NAMIC has joined with the Floridians for Lower Insurance Costs to urge lawmakers to allow the legislation to sunset.

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For further information, contact
Nancy Grover
(202) 628-1558 Tel
(202) 628-1601 Fax
ngrover@namic.org