The End of Florida’s ‘No-Fault’ Auto Insurance System and Its Benefits

By Mario Tacher on Feb 15 in Legal News.

The Florida House voted overwhelmingly this month in an 88-15 vote to repeal the state’s no-fault auto insurance law. Instead of requiring drivers to carry personal injury protection (PIP) in the amount of $10,000 to cover their own injuries regardless of who is at fault, House Bill (HB) 19 offers a new plan in which drivers would carry bodily-injury liability insurance (BI) at limits of $25,000 per person and $50,000 per accident to cover injuries to others.

The bill’s proponents assert that the current no-fault law, enacted in 1972, is flawed because it imposes the cost of an auto accident on the victim through increased insurance rates, instead of the person who caused the accident. In 2012, lawmakers passed a reform measure (HB 119to crack down on losses associated with fraud. The 2012 no-fault motor vehicle bill, went into effect on Jan. 1, 2013, and limited the time accident victims have to receive medical treatment following an auto accident.

Despite the reforms, auto insurance costs have been increasing in recent years. Coverage requirements for Florida drivers are some of the lowest coverage amounts in the nation (i.e., $10,000 in PIP to cover a driver or passenger’s injuries regardless of who is at fault in an accident). However, Florida drivers paid the fifth-highest average auto insurance bill in the United States in 2015, according to officials and PIP premiums increased 25 percent in 2015 and 2016.

HB 19 would reduce rates for the average driver while providing increased coverage. More than 90 percent of Florida drivers already carry BI coverage, according to regulators. Therefore, a savings will result for Florida drivers because they will no longer have to pay for the cost of PIP protection, which has increased in recent years even for drivers who never get in an accident.

The Florida Senate is also working to pass its own version of a bill, intended to repeal and replace the current no-fault system. Similar to the House Bill, Senate Bill 150 repeals PIP and would require Florida drivers to purchase BI coverage at limits of $20,000 per person and $40,000 per accident, $10,000 for property damage, and $5,000 for medical payments. SB 150 phases in bodily injury liability coverage requirements over time until it reaches $30,000 per person and $60,000 per incident.

Florida drivers deserve meaningful auto insurance coverage—similar to the coverage requirements in 48 other states that already require BI coverage. In one example, Colorado drivers saved 35 percent on their overall auto insurance premiums after dropping a no-fault auto insurance system.

A recent study commissioned by the state of Florida found drivers could save up to $81 per vehicle or close to $1 billion collectively, by repealing the state PIP requirement, even with increases in BI coverage.

Both bills would end Florida’s status as one of only two states that do not require drivers to purchase BI insurance. It is becoming apparent that change to Florida’s no-fault auto insurance system is on its way, which is good news for Florida drivers. The new legislation could result in the biggest change to auto insurance coverage in almost 50 years.

Attorney Michael T. Gibson has been a long-time advocate for consumers’ rights and believes firmly that it is time for a change in Florida’s auto insurance laws to protect consumers. He continues to fight aggressively at legislative sessions in Tallahassee in hopes that Florida will pass a real auto insurance reform, one that fairly protects consumers, not insurance companies.