Opinion: Plenty of Fault in Florida “No-Fault” Insurance

Posted by Scot D. Goldberg | Feb 19, 2018 | 0 Comments

Now is the Time to Repeal PIP Auto Insurance Law

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When you register a car in Florida, you're required to purchase “no fault” auto insurance coverage known as PIP, or Personal Injury Protection.  PIP provides only $10,000 in coverage for bodily injury to the owner of the vehicle or their resident relatives. Sadly, $10,000 PIP and $10,000 in property damage coverage are the only types of insurance coverage necessary to drive here – and it is woefully inadequate in most circumstances.

In comparison, bodily injury coverage protects the victims of a crash caused by someone else's negligence.  Thousands of people are currently driving on Florida roads without the necessary insurance to cover your injuries if you are the victim of their negligence.

For years, Florida's legislative leadership has wrestled with just how to change the antiquated insurance system we have, but getting new laws regarding reasonable liability statutes on the books has proven unsuccessful.

Lawmakers are once again looking at a reform of the current no-fault system, and it's long overdue.

First implemented in 1979, no-fault insurance was intended to force drivers to buy PIP coverage in the amount of $10,000. The thinking was that it would provide financial benefits in the event of a crash in which one or more of the drivers did not have any insurance coverage. Lawmakers thought that would pump enough money into the system to cover the costs of the injured person's medical care and lost earnings from being rendered unable to work.

The problem with being a no-fault state is that there is no consideration as to whether a driver was behaving recklessly or negligently. In Florida, it doesn't matter if one driver was careless or negligent behind the wheel – PIP insurance coverage provides the same $10,000 in “protection” to everyone.  

Florida is one of only two states that still has a no-fault insurance system, as opposed to mandating that drivers be required to purchase bodily injury coverage. The insurance industry would have you believe that rates would increase dramatically if Florida drivers were forced to buy bodily injury protection. Frankly, they also don't want to reform a system that requires drivers to pay steadily increasing premiums for coverage that actually offers less and less coverage every year as the cost of medical care rises.

The out-of-date statute requiring mandatory purchase of $10,000 of PIP coverage is simply inadequate, and inflation has eroded it to the point it now covers a very small amount of the medical costs you'll incur after a serious crash.

They repealed the no-fault system in Colorado, and insurance rates went down by double digits for 10 of the past 11 years.

They repealed the no-fault system in Connecticut, and consumers saw an almost 10% reduction in their premium rates. Georgia also trashed the no-fault model and saw rates plummet by 12.5%.

Now, it's time for Florida legislators to do the same.

Relying on studies and research conducted by the insurance industry is not an ideal way for the average consumer to fully understand what would happen if Florida repealed their no-fault system. For a less biased view, you can read a study prepared by the Florida Office of Insurance Regulation, which predicts an “estimated overall reduction in premiums of 9.6 percent on the liability coverage package or $81 per car annually for the average driver.” 

There is currently a bill, (SB 150), that cleared a key Senate committee in January of this year and is scheduled for further votes in the Florida legislature. Written by Tom Lee, a Republican representative from Brandon, the bill would eliminate the requirement that driver carry a mandatory $10,000 in PIP coverage and require they carry coverage for bodily injury and medical payments in it's place.

Senator Lee is quoted as saying, “While well-intentioned anecdotally, Florida's Motor Vehicle No-Fault Law has resulted in widespread fraud, abuse and a complex litigation process.”

As attorneys who have spent our careers fighting for the rights of people injured through no fault of their own, we couldn't agree more.

Goldberg Noone, LLC, is a personal injury law firm serving Southwest Florida from it's principle office in Downtown Fort Myers. If you have any type of legal questions on auto insurance coverage or any other topic, call 239-461-5508 for answers at no cost and with no obligation.

About the Author

Scot D. Goldberg

Local People. Local Practice. Local Knowledge. Scot Goldberg is a founding partner of the Goldberg Law Firm. See his attorney profile for more information.


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