By: Gabrielle Massari
Update: Senate Bill 54 was vetoed by Gov. Ron Desantis, and therefore legislators have to go back to the drawing board if they want to repeal PIP. Read more here.
For nearly 50 years Florida’s auto insurance laws have included “no-fault” coverage, but if new legislation is passed by the house and signed by Gov. Ron DeSantis, no-fault will be no more. You can read more about what no-fault and PIP laws are here.
Florida is currently one of only twelve states with no-fault laws and is one of only two states that currently does not require any bodily injury liability coverage (NerdWallet). This change is a hotly debated issue with insurance companies on one side, attorneys on another, and consumers left unsure what this change could mean. We are going to break it down from a personal injury attorney’s perspective.
What is exactly changing in Florida’s Auto Insurance Laws?
If the current bill, Senate Bill 54, that the Florida Senate and House have passed is signed by the Governor here are the changes you can expect:
- Florida would still require $10,000 in property damage coverage, there is no change here.
- Florida’s “Personal Injury Protection” or “No-fault” minimum coverage requirement that pays out regardless of if the insured person caused an accident would be cut from a $10,000 requirement to $5,000 optional add-on to carry what is known as Medical Payments.
What Mike thinks of this: With this new optional $5,000 in med pay, there is not an 80% maximum limit that PIP currently has and the $5,000 will cover 100% of the first $5,000 in medical bills, if purchased. So why is this in the bill, according to Mike it is because there had to be a compromise with the lobbyists representing chiropractors, medical providers, and hospitals, as they wanted some type of coverage that would pay them following an accident. If there is no way to pay these providers through car insurance coverage upfront, and the client did not have health insurance, then they could not ensure they would get paid.
Does this protect you as a consumer? This provision only protects those without health insurance, which is why it is optional. If you do have health insurance. While this may not help everyone, it will help several Floridians who do not carry medical insurance to get care after an accident and it appeases the lobbyists enough to get this important first step passed.
- Every Florida motorist would be required to carry a minimum level of $25,000 per injury or death of one person and a total of $50,000 per accident occurrence in bodily injury coverage.
What Mike thinks of this: This is a great first step. Additionally, the minimums of $25,000/$50,000 are slated to increase by $10,000-$20,000 in the next few years. So why is this a good change? Well first, it brings Florida in line with 48 other states that require some level of bodily injury coverage. So, we are going back to a system that makes the person at fault for the accident pay for your injuries, pain, and suffering, medical expenses, and lost wages. Secondly, this will benefit our clients – up until now there was no requirement to have bodily injury. The statistics in Florida show that about 27% of all drivers in Florida are completely uninsured, on top of that – 10% of the remaining choosing to get the bare minimum which is currently just the PIP protection and property damage. So this means that about 40% have no bodily injury liability coverage – so unless you have Uninsured Motorist coverage 40% of people who might hit you will leave you with nothing to recover and no money available to help you. This is a start to have at least $25,000/$50,000 as more people will have coverage that protects the person they injure.
What Those Against the Change are Arguing
Those against the bill have a few different arguments for keeping the no-fault law. They argue that the percentage of Floridians who do not carry any insurance will increase because those that do carry the minimum will not be able to afford the new minimum insurance.
However, studies have shown that there will only be no rise to an insignificant rise in premiums if a driver is going from having just PIP coverage and Property Damage coverage to having Property Damage, Bodily Injury Liability, and Medical Payments. PIP insurance part of the reason Florida Insurance specifically is so expensive, normally in the Top five in the nation, is because it is fraught with fraud such as staged accidents, and consistently overpriced medical billing. Taking it away also takes away a significant portion of the premium and might lower the majority of rates for consumers. When Colorado did something similar repealed their no-fault system in 2003, rates fell. Additionally, you cannot carry Uninsured Motorist Coverage without first having Bodily injury Coverage. So, in theory, more people might choose to also carry UM now that they have to carry BI anyway.
Representative Erin Grall stated, the problem with the current system perfectly saying, “You have physicians, medical groups, different entities that survive off of this predatory scheme of reimbursement rates, we have various stakeholders who have been accustomed to this line of payment, which they don’t want to let go of.”
The Biggest Benefit of Making this Change
Something that not many people understand is that this change would make a big difference in what those who are injured due to the negligence of others are able to recover after an accident. Part of this “No-Fault” system we have had for 45 years is that it required the injured person to prove that they suffered a permanent injury in order to be entitled to any money for pain and suffering which encompasses: mental anguish, loss of capacity for the enjoyment of life, disability and more. So, for most car accidents in Tampa, which are moderate, injured drivers are not entitled to receive any money for pain and suffering unless they suffered a permanent injury that can be proven. All accidents that are fairly routine accidents that may or may not result in a permanent injury but do have injuries such as the strain and sprain of the cervical spine and low back- without evidence of permanence, even though clients can suffer from pain for years, they are not entitled to any money unless a jury concludes otherwise.
This is the biggest injustice of the no-fault system. PIP was the only reason for the “permanent injury” rule, so now with this new legislation, the need to prove that is gone. Now our clients will be able to be compensated for that pain and suffering that occurred for let’s say a year, or two instead of receiving nothing.
Takeaways From this Potential Change to Florida’s Car Insurance Laws
This potential change to Florida’s auto insurance system will be a big change. However, we believe that its benefits are worth it, as more people who are injured due to another’s negligence will be able to get the compensation that they deserve from the person that actually caused their injuries. If you want to learn more about this or have unfortunately been injured in a car accident in the Tampa, Spring Hill, or Wesley Chapel area, please give us a call at 813-915-1110 for a free consultation.