Proposed Legislation Would End Florida’s No-Fault Auto Insurance System
Author: Jennifer Long
Florida may be closer to joining some other states that have moved away from a no-fault auto insurance system. After indications that the 2012 reforms to Florida’s personal injury protection coverage requirements have failed to realize the expected insurance rate savings, Florida’s legislature is about to consider proposed legislation that would dramatically change the state’s auto insurance requirements in addition to overhauls regarding property damage claims caused by hurricanes. Under the prospective law, coverage for personal injury protection would be eliminated, and Florida motorists would instead be required to hold coverage for bodily injury liability.
While the proposed legislation still has hurdles to cross before advancing to a full vote, many legislators in both parties are unhappy with the current no-fault system.
The 2012 reforms were projected to result in a 25 percent reduction in personal injury protection rates, but rates actually dropped by less than 15 percent by 2014–and have gone back up by more than 25 percent since 2015.
Similarly, the rates for liability coverage in general have risen by more than 23 percent since the end of 2014. These rate increases have been driven by several factors, including growing medical care and vehicle body work costs, a larger number of Florida drivers, and greater incidence of distracted driving.
What are the likely consequence of repealing the current no-fault system?
First, Florida drivers will likely see a dramatic drop in their car insurance premiums, as no-fault auto insurance is almost always more expensive that tort insurance. Second, court cases following injuries incurred during a car collision would almost certainly rise dramatically. The alternative to no-fault insurance is bodily injury liability coverage, in which the injured party in a car accident is paid by the insurance of the at-fault driver. This shift in systems would likely cause more injured motorists to take the at-fault driver to court to try to recoup their medical expenses.
Still, some experts remain proponents of the current no-fault system. As the Florida Medical Association’s general counsel, Jeff Scott, pointed out, the 2012 reforms helped reduce insurance fraud and the current system ensures that emergency room doctors are paid for their treatment of car accident victims. Scott also noted that Congress’ planned repeal of the Affordable Care Act may result in more Floridians without medical insurance; in the case of a car accident injury, these residents would be required to pay huge emergency room bills upfront under the proposed auto insurance system.
Similarly, Michael Carlson, the president of the Personal Insurance Federation of Florida, has warned that auto premium savings, when moving from a no-fault system to bodily injury liability coverage, are not guaranteed and will depend on the mandatory premium pricing.
If you’re unsure about your rights and responsibilities following a car accident on Florida’s roads, the attorneys at Ask2Amigo law firm can provide legal guidance. Contact us today to schedule a free consultation.