Insurers say no-fault repeal would be costly to Florida drivers

The American Property Casualty Insurance Association says repealing the no-fault auto insurance system could jack up insurance rates for Florida’s low-income drivers.

Bills moving in both chambers (HB 719/SB 54) would replace the currently required $10,000 personal injury protection (PIP) coverage in favor of mandatory bodily injury (MBI) coverage that pays out up to $25,000 for a crash-related injury or death or up to $50,000 for injury or death in a crash involving two or more people.

The higher coverage will translate to higher rates, APCIA says. Especially for the 40% of Florida drivers who carry minimum limits below what is described in the PIP repeal bills.

If the current proposals are passed as-is, those drivers could see their auto insurance costs rise by $165 to $876 a year, according to data assembled by APCIA, a trade group representing auto, home and business insurers.

APCIA warned that the House proposal would raise rates for all drivers — even those whose coverage far exceeds the proposed minimums — by an average of 5%. The figure comes from a preliminary analysis produced by Milliman and stems from the House bill’s failure to address Florida’s bad faith laws, APCIA said.

“Low-income drivers who purchase minimum limits in Florida are likely to be hit the hardest financially if Florida’s no-fault auto insurance system is eliminated and replaced with a mandatory bodily injury coverage system,” said Logan McFaddin, Assistant Vice President of state government relations for the APCIA. “This could result in even more uninsured motorists on Florida’s roads, which is a serious concern as Florida has one of the highest rates of uninsured motorists in the nation at approximately 20%.”

“Florida drivers already pay the highest premiums in the country for full auto insurance coverage. With the pandemic putting financial strains on consumers and businesses, now is not the time for lawmakers to implement major policy changes that will likely increase costs drastically for those who can least afford it.”

McFaddin said the state’s legal system is “rife with rampant lawsuit abuse” and repealing no-fault without addressing bad faith laws would only make it worse.

“Our state’s court system is experiencing a backlog of more than one million cases due to the pandemic. This is not the time to send more auto insurance claims to court by repealing the no-fault auto insurance system,” added McFaddin.