People moving to Florida often fail to realize that the state uses a car insurance system that differs from other states. Unless you move to Florida from New York, Pennsylvania, or any of a handful of other states that use no-fault insurance, you might not even understand the unique nature of Florida’s no-fault system.
When you buy auto insurance in Florida, you must purchase personal injury protection (PIP) coverage. PIP coverage is what makes Florida’s auto insurance into a no-fault system.
Here are some facts about no-fault auto insurance and how you can get compensation after a car accident in Florida.
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Florida’s No-Fault Auto Insurance System
Most states use a fault-based auto insurance system. Under this system, all victims in a car accident file claims against the at-fault driver’s auto insurance policy. If the insurer determines its client caused the accident, it will pay claims up to the policy limits.
If the insurer denies the claims or the policy cannot cover all of the losses from the accident, the accident victims must sue the at-fault driver for compensation.
In the 1970s, states like New York, Massachusetts, and Florida realized that the fault-based system was clogging courts with car accident lawsuits. Premiums were skyrocketing because insurers had to spend time and money investigating the cause of every car accident and defending its customer in court.
Faced with these issues, law professors devised a no-fault system that would guarantee basic coverage for all accident victims after a car accident regardless of fault.
Under this no-fault insurance system, every car owner would buy auto insurance that included PIP coverage. After an auto accident, each injured person would look to their vehicle’s PIP coverage for injury compensation rather than the at-fault driver’s liability coverage.
What Does PIP Stand for?
PIP stands for “personal injury protection.” It provides the coverage that makes Florida’s car insurance a no-fault system.
When you get into a car accident, you can claim PIP benefits regardless of fault. More specifically, you can claim PIP benefits even when you cause a car accident.
This system guarantees that everyone, including the at-fault driver, receives basic medical and disability benefits after a car accident. PIP covers everyone in the insured vehicle, including passengers. It also includes non-motorists, like pedestrians and bicyclists, hit by the insured vehicle.
PIP benefits include:
- 80% of your necessary medical expenses
- 60% of your lost income
Florida has adjusted these benefits over the years to combat insurance fraud. By forcing you to pay a copay for any covered medical expenses, the state assumes you will not file a fraudulent claim. But for bona fide claimants, this copay can strain their finances after an accident.
How PIP Claims Get Processed
When you get injured in a car accident, you will file a claim with your auto insurer for PIP benefits. Your insurer does not need to investigate the cause of your accident because fault does not matter.
Instead, your insurer will investigate your injuries and the medical treatment you received by reviewing your medical records. An insurer can deny a claim for PIP benefits if:
- The accident did not cause any injuries
- Your injuries were pre-existing conditions
- You received unnecessary medical treatment
If you receive a claim denial, you can often overcome it by submitting additional records or medical opinion letters that rebut the grounds for rejection.
For example, if the insurer denies your claim because your injuries existed before the accident, you can still potentially recover compensation if you submit evidence showing the accident worsened your injuries.
Limitations on Lawsuits Under Florida’s No-Fault System
The tradeoff of the no-fault system is that you cannot seek compensation from the at-fault driver unless you satisfy one of two conditions:
- Your covered losses exceeded your PIP policy limits or
- You suffered a serious, permanent injury
In Florida, you have a $10,000 PIP policy limit. Once your auto insurer has paid $10,000 in benefits, you have exhausted your PIP benefits. Florida law allows you to seek any additional compensation from the at-fault driver. However, you can only claim economic damages like medical expenses and lost income.
If you suffered a serious, permanent injury, you can seek compensation from the at-fault driver regardless of your losses. If your injury is serious and permanent, you do not need to exhaust your PIP benefits before pursuing the at-fault driver for economic and non-economic losses, including pain and suffering.
Injuries that qualify as serious and permanent include:
- Permanent loss of a significant bodily function
- Permanent injury
- Significant and permanent scarring or disfigurement
When you file a lawsuit against the at-fault driver, the court will hold a hearing to determine which of the exceptions to the no-fault system apply. If neither exception applies, the judge can dismiss your case.