Florida Lawmakers to Study Tossing No Fault Coverage


Republican legislators in Florida have allotted $125,000 for the study of what it would mean for the Sunshine State to get rid of he system of no-fault car insurance (PIP – personal injury protection) that has been in place for more than 40 years. 

Lawmakers reportedly had hoped that legal changes four years ago would lower payments for consumers. However, Florida’s top insurers show that since the beginning of last year, auto insurance premiums are up 40 percent.

Now, records from the state’s Department of Financial Services show officials picked an outside research firm to investigate the effect that nixing no-fault will have. A draft of the report is due at the end of August, with the final report due soon after. 

Insurancenewsnet.com reports the objectives of the study include:

  • Research potential impact of PIP coverage requirements were repealed and replaced different amounts of coverage for bodily injuries;
  • Determine the  result of repealing auto insurance purchase requirements.

As it now stands, F.S. 627.736 requires motorists to purchase $10,000 in PIP coverage. This no-fault insurance model got its start in the 1970s, and the idea is that there is a safety net to relatively minor injuries, no matter who was to blame for the crash. Ultimately, legislators wanted to eliminate the need for car accident lawsuits except for the most serious cases.

But as it turned out, there are many lawsuits that pertain solely to PIP. Some drivers complain the system is bogged down by fraud and that they are forced to pay for medical coverage they already have, either from employer plans, Medicare/ Medicaid or other health insurance plans.

Floridians are fourth-highest in the country when it comes to their auto insurance bills. It’s one of just a few states that has a no-fault system.

Before 2003, Colorado had a no-fault system too. But when lawmakers dropped the no-fault coverage that year, drivers saved 35 percent. Ultimately, the state saved drivers $322 annually. Opponents of the measure at the time it passed feared there would be a slew of personal injury lawsuits as soon as no-fault coverage was dropped. But that didn’t happen.

It’s likely that the outcome in Colorado is something researchers in the Florida study will explore.

One option that is being given a great deal of weight by lawmakers is requiring all drivers to carry bodily injury liability insurance – something 9 out of 10 insured Florida drivers already have.

Depending on the study findings, lawmakers say they will move forward with trying to pass the legislation in 2017. Because it could take at least a year or two to implement, most say it likely won’t become reality until 2019.

On the other hand, there are those who oppose taking such action – including Gov. Rick Scott, hospitals and many health care providers. Even some injury attorneys believe it’s necessary so that at least we know for sure drivers will have some amount of coverage for injuries.

Yet, the premium hikes are a huge motivator. PIP rates with the biggest 25 insurers in the state rose by nearly 15 percent just since the beginning of 2015. One insurer even raised the premium by nearly 40 percent in that time frame.

Lawmakers say they can do better.

If you have been injured in an accident, contact the Hollander Law Firm at (561) 347-7770 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

Florida Considers Junking No-Fault Auto Insurance, May 18, 2016, InsuranceNewsNet.com