Could Florida Soon Repeal No Fault Insurance?

The short answer? Yes. On Monday, February 15, Florida senators approved a bill that would do away with the state’s longstanding no-fault auto insurance system. The bill is known as SB 54, and while it is not yet law, it is much more likely that it will be soon. Trial attorneys, insurers, and medical providers are all closely watching this debate as it unfolds, as it will impact the way that personal injury cases unfold for years to come.

Florida is currently one of only a few (twelve) “no-fault” states. This means that in an accident, though every accident is, in reality, someone or some party’s fault, each injured party goes through their own insurer first to get benefits before making other legal claims. Every driver in Florida whose vehicle is registered in the state or who is visiting for more than 90 days is required to carry at least $10,000 in PIP coverage (personal injury protection). This covers 80% of medical expenses and 60% of lost wages in the case of an accident injury, and $5,000 of funeral expenses in cases of wrongful death. If an injured victim’s medical expenses exceed $10,000, they are legally able to sue in order to recover maximum monetary compensation. Florida is one of only two states that does not “require drivers to carry liability coverage that would immediately kick in if they cause the bodily injury or death of another person while operating a motor vehicle”, said Senate President Wilton Simpson, a proponent of the bill.

SB 54, the bill introduced by Sen. Danny Burgess, R-Zephyrhills, seeks to change that system. Under the new system, motorists would instead be required to carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person, $50,000 for injuries or deaths of two or more people, and $10,000 for property damage. Insurers would be required to offer medical payments coverage starting at $5,000, with deductibles up to $500. The bill lowers these minimums for drivers with incomes below 200% of the federal poverty line or who are full time students.

This is not the first time that an attempt to repeal the 1970 no-fault law has been passed. Since 2012, legislative efforts have tried to strike down the law and replace it, but all efforts have been largely unsuccessful. In 2018, the House voted to repeal it, but that bill only advanced through one Senate committee before the session adjourned. Last year, another bill passed three House committees but died on the floor. A similar bill didn’t make it past the first Senate committee hearing. This bill, though, is unique, not only because it has made it farther than the others, but because of the bipartisan push behind it.

Proponents of the bill say that the current PIP system is rife with inefficiency and fraud, and that the $10,000 coverage limit is insufficient for today’s injury costs. They also claim that the bill will more accurately place liability with the party that caused the accident.

Critics of the bill note that bodily insurance coverage does not (unlike PIP) pay out automatically, which could leave injured accident victims or providers without coverage. Florida Justice Association President Eric Romano also says that the bill would basically create “an unenforceable honor system” because it does not require insured customers who are attempting to secure a lower minimum to provide proof that they meet income qualifications. Insurers and medical providers are likely to be on the side pushing back against the bill’s passing.

Another issue of contention around the bill is cost. Because Florida drivers have the third-highest insurance costs in the entire United States, and one state study found that introducing bodily injury insurance could save drivers $81 per car or close to $1 billion annually, people in support of the bill are expecting it to decrease consumer costs. However, a few studies conducted in 2018 predicted that repealing no-fault would increase consumer premiums by more than 5%. Findings by Milliman, an actuarial consulting firm, “the need for Florida drivers to purchase uninsured/underinsured coverage to make up for the loss of PIP coverage would mitigate any savings from the regulation change”.

There are a few other studies and reports on both sides. In short, nobody really knows for sure how much premiums would increase or decrease after the new law would be passed because there are a number of variables that would affect the outcome.

The bill has a few other notable parts as well; it would repeal the limitation on pain and suffering damages that could be awarded (limited by the 1970 no-fault law), create a “new framework” that provides a “clear set of standards” for handling bad-faith insurance claims, and allowing insurance companies to offer policies with max $200 deductibles for windshield repairs (currently, insured motorists do not have to pay for this service).

Burgess’ bill still has to go to the Rules Committee and then to the full Senate, whose annual legislative session begins on March 2nd.

Knowledge is power! We are watching this bill very closely in order to learn more about what the outcome would mean for our clients. If you have questions about how the passing of this bill could affect your current personal injury case or what The Florida Law Group’s opinion on the bill is, don’t hesitate to call our personal injury trial lawyers and ask! And if you have been injured in an accident due to someone else’s negligence, call today to discover your legal options.