Nearly 12,000 Floridians have sent letters to lawmakers this month urging them to preserve Florida’s existing personal injury protection and “no-fault” auto insurance system.
“Florida drivers are taking action and writing to their elected officials to ask that they oppose HB 719 and SB 54 and to make it clear that now is not the time to raise auto insurance costs in our state,” said Logan McFaddin, assistant vice president of state government relations for the American Property Casualty Insurance Association (APCIA). “Floridians already pay the highest premiums in the country for full auto insurance coverage, so they are understandably concerned about any public policy changes that would push costs even higher.”
The bills, which are awaiting a floor vote in the House and already cleared in the Senate, would repeal current personal injury protection requirements and replace it with required bodily injury coverage.
Critics of the proposal worry the legislation would increased costs to insured drivers, particularly those who currently carry minimum coverage, and lead to more uninsured drivers on Florida roads. Critics also contend the change could increase litigation over insurance claims.
“Any reforms to Florida’s auto insurance system should be focused on reducing consumer costs and preventing fraud. Unfortunately, this legislation not only fails to do that, but it is also likely to ultimately lead to more uninsured motorists on our roads — when Florida already has one of the highest rates of uninsured motorists in the nation – and increase litigation,” McFaddin added.
APCIA obtained actuarial assistance in assessing the impact of the current bill language on Florida’s consumers and found it could increase the cost of the average auto insurance policy by as much as 23% or $344.
When factoring the legislation’s lack of meaningful bad faith reforms, a primary source of lawsuit abuse and key cost driver in the Florida auto insurance system, according to the group, costs could increase an additional 3% – 6%, increasing the total impact on the average auto insurance policy to between $399 and $455. If passed, the legislation is likely to have an even greater impact on drivers who purchase minimum limits, with those policyholders’ auto insurance costs increasing by as much as $805 a year, the group argues.
Those backing PIP repeal say the system is rife with fraud and that the $10,000 coverage limit, set in the 1970s, is woefully inadequate five decades later.
“The key question before us is are the current coverages sufficient, and I think we can all agree that they’re not. This bill seeks to address just that,” Senate sponsor Danny Burgess told senators in a floor hearing on the bill earlier this month.
PIP coverage pays out regardless of which party is responsible for an accident and it does so quickly. Bodily injury coverage, however, doesn’t pay out until a fault determination is made, which can leave health care providers or patients on the hook for thousands of dollars in medical bills while they wait for a claim to resolve.
No-fault repeal is a perennial effort in the Legislature.
And passing the bill was not effortless. Burgess joked about the several times the bill had been postponed on the floor this month before lawmakers finally considered it Wednesday.
Senators trudged through 12 amendments, all but four of which were withdrawn. Among the approved amendments was one from Senate Democratic Leader Gary Farmer to require drivers have $5,000 in med pay coverage, which was originally optional.
Florida has some of the highest auto insurance rates in the country, and they are rising faster than every other state except Colorado, which pins the blame on repealing its own no-fault law.
Florida Politics reporter Renzo Downey contributed to this report.