Florida's Shift Away From No-Fault Insurance: A New Era For Motorists

Florida's House of Representatives voted to repeal the state's no-fault auto insurance laws in 2021, which would have required all drivers to carry their own bodily injury coverage. The Senate passed its own version of the bill at the same time, and the changes were set to take effect on January 1, 2022. However, Florida Governor Ron DeSantis vetoed the bill on June 29, 2021. Florida is one of only two states that does not require motorists to carry bodily injury coverage, and lawmakers believe that requiring motorists to carry more insurance will reduce premiums. The current no-fault provision requires motorists to carry a $10,000 minimum in personal injury protection coverage, which pays for medical and funeral costs regardless of who was at fault in the accident.

Florida's no-fault provision requires a minimum of $10,000 in personal injury protection

The $10,000 minimum for PIP coverage hasn't changed since Florida became a "no-fault" state in the 1970s. While this no-fault system was intended to reduce the number of lawsuits related to car accidents, it has faced criticism in recent years due to fraud and high insurance rates. As a result, there have been efforts to overhaul Florida's automobile insurance laws and repeal the no-fault provision.

Under the proposed changes, the personal injury protection coverage and the no-fault provision would be discontinued. Instead, motorists would be required to carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person and $50,000 for two people. This increase in required coverage is expected to lower insurance rates for some but could also lead to higher rates for others, especially those who don't currently have sufficient coverage.

While Florida's no-fault provision has faced challenges, it's important to note that it still plays a significant role in the state's insurance system. The minimum of $10,000 in PIP coverage provides a level of protection for individuals involved in car accidents, ensuring that they can receive compensation for their medical expenses and lost income. However, it's recommended to purchase a policy that covers a greater amount, as the minimum may not be sufficient in the event of a serious accident.

Florida is one of two states that don't require bodily injury coverage

Florida's no-fault system does not apply to vehicle damage claims after a car accident. A liability claim for damage to (or total loss of) a vehicle can be made against the at-fault driver in Florida, with no limitations.

Florida law requires that all drivers must carry certain amounts of car insurance coverage. The only two required forms of insurance are personal injury protection (PIP), which pays for your own medical bills after a crash, and property damage liability (PDL), which covers damage you cause to other people's property.

Florida's no-fault law means that, in the event of a car accident, both parties turn to their auto insurance policies to make claims, regardless of who was at fault. To cover this, all Florida drivers must have Personal Injury Protection (PIP) insurance included in their car insurance policy.

Under Florida law, a PIP claimant can receive:

• 80% of reasonably incurred medical expenses related to car accident injuries
• 60% of lost income resulting from the accident
• $5,000 in death benefits

Florida's no-fault insurance system was first adopted in the 1970s, dropped in 2007 on a technicality, and then immediately reenacted. However, fraud persisted—aided by lawyers, doctors, and auto glass contractors—making Florida one of the least affordable states for car insurance.

While Florida does not require bodily injury liability insurance, it is still recommended that drivers carry it. Bodily injury liability coverage pays for the other driver's medical expenses if you are at fault in an accident.

The new bill will require a minimum of $25,000 in bodily injury coverage for one person

Florida's House of Representatives has voted to repeal the state's "no-fault" laws and require all drivers to carry their own bodily injury coverage. The bill proposes that drivers will be required to carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person and a minimum of $50,000 in coverage for the injury or death of two people. This is a significant change from the current "no-fault" provision, which requires motorists to carry a minimum of $10,000 in "personal injury protection" coverage.

The new bill, which has been passed by the Florida House with a vote of 99-11, is intended to alleviate the state's high automobile insurance rates. By requiring motorists to carry more insurance, lawmakers believe that premiums will be reduced. According to Representative Erin Grall, R-Vero Beach, who has been advocating for an overhaul, "Florida is out of step with almost every state, and yet your car insurance rates and premiums keep going up...I believe it's incumbent upon us to make sure that people have adequate coverage."

It is important to note that the bill has not yet been signed into law and may still undergo changes. Additionally, there are concerns that increasing the minimum coverage requirement could lead to more drivers dropping their insurance altogether, as insurance in Florida is already considered expensive. However, supporters of the bill argue that most insured Floridians already carry at least $25,000 in bodily injury coverage, so their rates would likely decrease.

The bill also addresses the issue of fraud, which has been a persistent problem in Florida's insurance system. By requiring higher coverage amounts, the bill aims to reduce the incentive for fraudulent claims and lower the overall cost of insurance for honest motorists.

Overall, the new bill represents a significant shift in Florida's automobile insurance laws and could have a substantial impact on drivers in the state. While there are potential risks and concerns, the goal is to provide better protection and lower rates for Florida drivers.

The bill could lower rates for some but raise them for others

Florida's "no-fault" car insurance laws have been a topic of debate in recent years, with lawmakers considering a major overhaul of the state's automobile insurance regulations. The Florida House voted 99-11 to repeal the state's "no-fault" laws and require all drivers to carry their own bodily injury coverage. This move is expected to have varying effects on insurance rates, lowering them for some while raising them for others.

Under the current "no-fault" system, Florida motorists are required to carry a minimum of $10,000 in personal injury protection (PIP) coverage, which pays for medical and funeral costs regardless of who is at fault in an accident. However, this $10,000 minimum has not changed since the 1970s, and Florida is one of only two states that don't mandate bodily injury coverage.

The proposed changes to the insurance laws would eliminate the "no-fault" provision and the PIP coverage requirement. Instead, drivers would be mandated to carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person and $50,000 for two people. The insurance of the at-fault driver would be responsible for paying out the claims.

Lawmakers believe that requiring higher levels of bodily injury coverage will reduce premiums for most insured Floridians, who already carry at least $25,000/$50,000 in coverage. However, it is estimated that 35-45% of Florida drivers do not have this level of coverage, and they could face higher insurance rates if the new bill is implemented.

Insurers have also warned that increasing the minimum coverage requirements could lead to more drivers dropping their insurance altogether, as the cost of insurance in Florida is already very high. This could result in an increase in the number of uninsured motorists, which is already a significant issue in the state.

The bill has sparked discussions and concerns among lawmakers, with some arguing that it could have unintended consequences and lead to higher rates for a significant portion of Florida drivers. However, the final decision on the bill's approval rests with Governor Ron DeSantis.

Insurers warn that the bill could backfire and cause more people to drop coverage

Florida's no-fault insurance law has been a topic of debate for several years, with insurers warning that any changes could have unintended consequences. The law, which has been in place since the 1970s, requires motorists to carry a minimum of $10,000 in personal injury protection (PIP) coverage, which pays for medical and funeral costs regardless of who is at fault in an accident. While this may seem like a good idea, there are concerns that it has led to increased insurance fraud and higher premiums for Floridians. In 2021, the Florida House voted 99-11 to repeal the no-fault law and require all drivers to carry their own bodily injury coverage, with a minimum of $25,000 for injury or death of one person and $50,000 for two people. This change was expected to lower rates for some while raising them for others.

However, insurers have warned that this change could backfire and cause even more people to drop their coverage. Florida already has one of the highest ratios of uninsured motorists in the nation, with nearly one in five drivers carrying no auto insurance at all. The high cost of insurance is believed to be a significant factor, and increasing the minimum coverage requirement could lead to even more people forgoing coverage altogether. This, in turn, could result in higher rates for those who remain insured, as the pool of insured drivers would be reduced.

The potential consequences of the bill were highlighted by a 2018 study by the actuarial consulting firm Milliman, which showed a potential average increase in premiums of $67, or a 5.3% increase. These findings contrast with a 2016 report by the Florida Office of Insurance Regulation, which projected a 5.6% savings for drivers with a shift to a bodily injury coverage requirement. The lack of an independent study of the bill has also drawn criticism from several Republican lawmakers.

The debate around Florida's no-fault insurance law is complex, with valid arguments on both sides. While the repeal of the no-fault law could lead to lower rates for some, it could also increase rates for others and potentially lead to more uninsured motorists. The potential impact on insurance fraud and litigation costs is also a key consideration. Ultimately, the decision rests with Governor Ron DeSantis, who has the power to veto the bill.

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