Last legislative session, the Florida legislature failed to pass a bill that would have required mandatory bodily injury insurance for drivers in Florida. The bill would have replaced laws enacted in 1971 as part of a no fault automobile insurance plan. This change in law aims to replace the current no fault system under which Florida drivers are forced to purchase only Personal Injury Protection (PIP) coverage, which is costly, and requires Floridians to purchase additional health insurance that is only in place when they are in a vehicle. According to a State-commissioned actuarial study, the proposed reforms would have saved drivers an average of $81 per car. Thankfully, last week a second and similar bill cleared it’s only committee in the Florida House and is heading to the floor for a vote. As always, we continue to recommend that Florida drivers purchase Uninsured Motorist insurance coverage as there is currently no requirement that Florida drivers purchase bodily injury insurance to cover the damage they cause unfortunate event of an automobile accident.
Florida’s Current No Fault Automobile Insurance Laws
In 1971, Florida adopted a no fault automobile insurance plan. “No fault” and “PIP coverage” are used interchangeably to describe an automobile insurance plan that allows policyholders to recover money for certain financial losses from their own insurers. The system was designed to provide injured drivers with up to $10,000 to cover medical bills and certain other costs, regardless of who was at fault for the accident that resulted in their injuries. Currently, owners of automobiles in Florida are required to purchase only $10,000 in PIP coverage and $10,000 in Property Damage Liability (PD coverage).
This current system is not working out very well. PIP coverage with a $10,000 limit does not cover much, insofar as it covers only 80% of medical expenses and 60% of lost income, leaving claimants responsible for 20% of medical expenses and 40% of lost income; and that’s only up to $10,000.00. Drivers with healthcare insurance are paying for PIP insurance that may overlap, thus double paying; this is especially costly for veterans, and the elderly who are already covered under federal health plans. A bigger problem is that, according to information provided to a panel of the Florida Senate, Florida drivers are paying insurance premiums that are among the country’s five highest for some of the lowest required coverage amounts. The vast majority of states do not have Florida’s no fault system that continues to riddled with fraud and leaves many victims responsible for their medical bills caused by the negligence of another driver.