Logan McFaddin: No-fault repeal legislation could significantly increase auto insurance costs for Florida drivers

Last year, Gov. Ron DeSantis took action to protect Florida drivers from substantial auto insurance cost increases by vetoing legislation that would have repealed Florida’s no-fault auto insurance system without implementing needed legal reforms. Floridians are grateful for the leadership he showed on this issue, his commitment to stand up for the best interests of our state’s drivers, and his efforts to protect their hard-earned money.

However, this Session, substantially similar legislation is again being considered in the Florida House and Senate. Once again, these bills could result in significant increases in auto insurance costs, especially for those who can least afford it. An independent analysis conducted by Pinnacle Resources of Senate Bill 150 and House Bill 1525 found that the proposals could cause auto insurance costs to skyrocket between 48 and 77% for drivers who purchase minimum limits. In Florida, that is approximately 40% of drivers.

Additionally, for Floridians currently carrying full-coverage auto insurance, the legislation under consideration this year could increase the cost of the average auto insurance policy by as much as 13.3%.

Floridians already pay some of the highest auto insurance costs in the nation and are currently facing cost increases for many goods and services as inflation continues to impact our nation’s economy. If the cost of auto insurance is driven even higher, especially for those who are low income, coverage could become unaffordable. This could lead to more drivers going uninsured, making Florida’s roads less safe for everyone. This is especially concerning since Florida has one of the highest rates of uninsured motorists in the nation at approximately 20%.

Any reform of Florida’s auto insurance system should prioritize reducing costs for consumers by addressing rampant legal abuse of Florida’s bad faith laws — a major cost driver that negatively impacts consumers. Like last year’s bill, SB 150 does not contain any meaningful reforms to Florida’s bad faith laws. Instead, the legislation would provide more opportunities for lawsuit abuse by implementing many new ambiguous standards, processes and definitions — all of which could be exploited by plaintiffs’ attorneys. Repealing Florida’s no-fault auto insurance system without meaningful bad faith reforms could lead to higher costs for consumers and worsen our state’s legal environment.

Gov. DeSantis also has shown exemplary leadership in improving Florida’s legal environment with his recent selections to the Florida Supreme Court. We are encouraged by the impact it may have toward addressing long-standing concerns with bad faith, rampant lawsuit abuse, and fraud in Florida’s auto insurance system, while ensuring policyholders’ rights remain protected.

Any attempt to repeal or reform Florida’s auto insurance system should focus on reducing consumer costs, preventing fraud and lawsuit abuse and ensuring policyholder rights are protected. Unfortunately, SB 150 and HB 1525 do not achieve these goals. Instead, auto insurance costs are likely to go up, especially for those who can least afford it. With inflation already putting financial strain on individuals, families and businesses, now is not the time to implement major policy changes that could increase costs even further for hardworking Floridians.

We respectfully ask the Legislature to put the brakes on higher auto insurance costs and vote no on SB 150 and HB 1525.

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Logan McFaddin is assistant vice president of state government relations for the American Property Casualty Insurance Association.