Florida’s Car Insurance New Law

FLORIDA’S CAR ACCIDENT INSURANCE LAW GETTING A COMPLETE MAKEOVER

Florida’s car accident law since 1971, commonly referred to as Personal Injury Protection (“PIP”), looks to like it will be given a substantial makeover.  On Friday, April 30, 2021, the last day of the legislative session, the Florida House approved a bill that repealed the law on the books since 1971 and replaced it with a system that requires drivers to carry mandatory liability coverage for injuries they cause to others.

This change to Florida motor vehicle insurance system has vast ramifications for the citizens of this State.

WHAT IS PERSONAL INJURY PROTECTION COVERAGE?

Since 1971, Florida required drivers to carry two types of insurance coverages, Property Damage coverage and Personal Injury Protection coverage, known as “PIP.”  PIP coverage helped pay the medical bills incurred by an injured party regardless of who caused the crash and injuries.  If you caused the crash and you were injured, your PIP coverage would pay for your medical bills.  If someone else caused the crash and you were injured, your PIP coverage would pay for your medical bills.  For this reason, Florida was known as a “No-Fault” state.  For more on Florida’s current PIP law, read our blog HERE.

Any amounts paid by PIP coverage did not have to be paid back later.  In exchange for this coverage to pay your medical bills, Florida also required that someone sustain a permanent injury in order to collect future non-economic damages – such as pain and suffering.

This system has undergone many changes since 1971 but three core pillars remained unchanged, 1) PIP provided $10,000.00 coverage to pay medical bills; 2) Injured parties did not have to pay back PIP insurers for money used to pay medical bills; and 3) Injured parties needed to show a permanent injury for non-economic damages.

This system looks like it will be completed upended.

WHAT DOES THE PIP REPEAL LAW PROVIDE?

The PIP Repeal Bill completely overhauls Florida motor vehicle insurance system.  The single biggest changes are the elimination of PIP coverage and the requirement that drivers carry liability coverage for injuries.  Other changes include option medical payments coverage of $5,000.00 to help pay for the insured medical bills – much like PIP coverage had.  Additionally, the statute keeps the mandatory death benefit of $5,000.00 to help with funeral expenses should someone lose their life in a car accident.

Prior to the PIP repeal, drivers were not required to carry insurance for those they injured or killed on the road.  As a result, a recent study found that over 20% of drivers in Florida were uninsured for injuries caused to others.  This placed Florida sixth on the highest percentage of uninsured motorists on the roadways.

Should Gov. DeSantis sign the PIP Repeal Bill, Florida will align Florida with 48 of the 49 remaining states in requiring drivers carry injury liability coverage.

HOW WILL THE NEW AUTO INSURANCE LAW AFFECT FLORIDIANS?

As with each law there are general pros and cons.  

The biggest benefit to Florida citizens is the knowledge that other drivers will be required to carry insurance in case they cause injury to others.  Another significant benefit will be the elimination of proving permanent injury for non-economic damages.  This will increase the value of almost any car accident, truck accident, DUI accident, and other motor vehicle accident.

The biggest unknown about this law is what is means to Florida’s citizens pocketbooks.  Current assumptions are that many Florida citizens will see an increase in premiums for motor vehicle insurance.  This may be the result of Florida citizens having to carry new or increased liability coverage.  Doug Bell, a lobbyist for Progressive insurance, stated that 45% of Progressive’s Florida customers currently carry less than what would be required.  Increased litigation and case values may also drive an increase in premiums as well.

CONCLUSION

Florida’s motor vehicle insurance law is on the verge of a complete makeover.  After passing the House and Senate, the bill now heads to Gov. DeSantis for his signature or veto.  If Gov. DeSantis does neither, the bill will become law in 15 days.

Presser Law, P.A. will continue to monitor and update the bill passage and any developments there may be,  We will also offer additional insight once more information is known.