Florida adopted a personal-injury protection [PIP] auto insurance law in 1979 and remains one of 10 states with a “no fault” mandate that requires motorists to carry $10,000 in medical coverage.
Since PIP coverage makes individuals responsible for their own injuries in an accident regardless of fault, the mandate was imposed to ensure timely payments for injured drivers and to avoid saddling the court system with lawsuits.
But 40 years later, the Florida Motor Vehicle No-Fault Law doesn’t appear to be fulfilling its intent, especially in terms of containing litigation. According to the state’s Office of Insurance Regulation [OIR], “the amount of PIP claims, and PIP payments, has skyrocketed.”
While PIP premiums represent roughly 2 percent of the insurance premiums Floridians pay, PIP lawsuits “account for nearly 50 percent of fraud referrals,” the OIR reports.
The Senate Banking & Insurance Committee on April 1 approved Senate Bill 1052, which would repeal Florida’s PIP law, eliminate limits on damages for pain and suffering, and require insurers to offer motorists “minimum security requirements” for bodily injury liability and property damage.
SB 1052, crafted by the Senate Infrastructure & Security Committee and co-introduced by Sens. Tom Lee, R-Thonotosassa, and Darryl Rouson, D-St. Petersburg, was advanced by the panel in a 5-3 vote.
The bill faces a hearing before the Senate Appropriations Committee before it can be presented on the floor.
PIP repeal falls in the same category as tort reform and assignment of benefit [AOB] reform---every year, for the last decade and beyond, proposals to do away with no-fault are filed and die in committees or on chamber floors.
Under SB 1052, motorists would have to carry $25,000 in bodily injury coverage, $50,000 for any two or more persons, and $10,000 in property damage coverage as “minimum security requirements.”
Additionally, insurers must offer customers optional policies providing $5,000 for medical expenses and at least $5,000 for death benefits, with optional deductibles.
If adopted, the new law would apply to any car insurance policies written after Jan. 1, 2020.
The state and bill proponents say doing away with no-fault would save motorists money in reduced insurance premiums, but not everyone agrees.