In Florida, Personal Injury Protection (“PIP”), or “No-Fault” automobile insurance, is a requirement for all drivers to carry. PIP covers expenses accrued as a result of injuries sustained in an accident, irrespective of who was at fault. Similar to other states, Florida has its own set of special laws and regulations surrounding PIP. Specifically, approximately 80% of one’s medical costs will be covered by PIP and, additionally, should the injury not be classified as an emergency, the injured party is only entitled to $2,500.00 worth of benefits.
In recent days, however, the Florida legislature has taken steps that could spell the end of the State’s no-fault auto insurance rules. Specifically, Senate Bill 54 would create a new framework to govern motor vehicle claims handling and third-party bad faith failure to settle actions against motor vehicle insurance carriers. The Senate previously passed it, and on April 30th, 2021, the House and Senate approved Senate Bill 54 in a 99-11 vote. If the bill is signed by Governor DeSantis, as it is expected to, it would take effect on January 1, 2022.
Under the new law, personal injury protection coverage and the no-fault provision would be discontinued. Florida drivers will instead be required to carry at least $25,000 in bodily injury coverage for the injury or death of one person, and $50,000 in coverage for the injury or death of two or more people. The insurance for the person at fault in the accident would be responsible for paying the claims. The reasoning behind this drastic move is that the discontinuation of no-fault insurance will stabilize and control Florida’s auto insurance rates. Notably, the Tampa Bay Times has recently reported that approximately 35% to 45% of Florida drivers currently do not carry $25,000 in bodily injury coverage.
The new bill, however, has been met with great trepidation from insurers who believe the bill will backfire. Specifically, some insurers argue that one of the reasons for the large auto insurance coverage gap in Florida is because the insurance is prohibitively expensive. Thus, if the minimum coverage requirement is raised, it may cause more drivers to drop coverage all together. Currently, Florida’s uninsured motorist rate rests at 20%, Low-income and underinsured drivers may be unable to purchase the higher amounts of coverage.
Callahan & Fusco will continue to monitor the progress of this proposed legislation.