Florida lawmakers are poised to renew the battle over whether or not the state’s no-fault car insurance system will be repealed. If a repeal is successful, removing no-fault insurance would arguably be the largest change to Florida motorist coverage in decades.
Here are the facts to know about Florida’s no-fault system as well as information on what a repeal could mean to your insurance.
Why Some Florida Lawmakers Favor a Repeal
To many Florida drivers and some key lawmakers, Florida’s no-fault car insurance system is a bloated and fraud-riddled system that costs too much, all while allowing drivers who are at fault to skirt responsibility for the damage and injuries they cause.
Florida Sen. Tom Lee is among the lawmakers who believe the time has come to repeal Florida’s requirement for personal injury protection (PIP), the official term for no-fault coverage. Lee argues that PIP’s good intentions have not delivered positive results, instead delivering “widespread fraud, abuse, and a complex litigation process.” Lee also argues that the value of PIP has eroded since it was enacted into law during the 1970s, all while auto premiums have continually risen in cost over the years.
Lee’s Senate Bill 150 aims to fix these issues by requiring Florida auto insurance to provide coverage for bodily injury and medical payments. If the bill passes, Florida residents will be required to purchase bodily injury liability coverage at the following limits:
- $20,000 per person or $40,000 per incident
- $10,000 for property damage
- $5,000 in medical payments coverage
It is the required $5,000 in coverage for medical payments that has become a contentious issue among lawmakers. Some lawmakers, such as Rep. Erin Grall, believe that mandating this form of coverage merely renames PIP while eliminating the driver savings that would come along with getting rid of PIP for good.
Grall believes a better solution would be to increase bodily injury coverage requirements to $25,000 per person and $50,000 per incident, while still leaving medical insurance as an optional consumer-driven choice. Grall’s idea, then, is that increasing Florida’s low coverage requirements would prevent the spikes to insurance premiums that are reflected under the current system.
Based on the data, this argument has some merit. Florida drivers have some of the lowest coverage requirements in the country, yet the state ranks in the top eight states for highest average premiums. PIP premiums, for their part, increased 25 percent in 2015 and 2016.
How Much Money Could Drivers Save With a PIP Repeal?
A study commissioned by the state of Florida found that drivers could save approximately $81 per car, which would add to a statewide, collective savings of nearly $1 billion if the statewide PIP requirement is repealed. Notably, these savings estimates include the projected increases to bodily injury liability premiums.
In general, it seems that the Senate and House largely agree on getting rid of PIP, despite some objections from hospitals looking for assurances of at least some reimbursement. That said, there is still ground to cover on the best path toward a PIP removal. Given the significant potential cost savings and the significant changes that would come from a PIP repeal, these legal developments warrant further monitoring in the weeks and months to come.
John F. Greene is a Destin auto accident attorney with more than three decades of courtroom experience. If you or a loved one has been injured in an accident, contact John online or call his office (850) 424-6833 for a legal consultation to take the first step toward receiving deserved compensation today.