Florida’s close to overhauling auto insurance, ending ‘no-fault’

The largest changes to the state’s automobile insurance laws in nearly 50 years could be a Senate vote away from becoming law.
Heavy traffic is seen along the southbound lanes of I-275 on the Howard Frankland bridge Wednesday, Aug. 28, 2019 in Clearwater.
Heavy traffic is seen along the southbound lanes of I-275 on the Howard Frankland bridge Wednesday, Aug. 28, 2019 in Clearwater. [ DOUGLAS CLIFFORD | Times ]
Published April 26, 2021|Updated April 26, 2021

TALLAHASSEE — Lawmakers continue speeding ahead with an overhaul of Florida’s automobile insurance laws.

With no debate, the Florida House voted 99-11 on Monday to repeal Florida’s “no-fault” laws and require every motorists to carry bodily injury coverage, a move that could lower rates for some while raising rates for others.

The biggest changes to the state’s automobile insurance laws in nearly 50 years could be just a Senate vote away from making it to Gov. Ron DeSantis’ desk. The Senate passed its own version of the bill, with slight differences, two weeks ago. It would take effect Jan. 1, 2022.

The changes, lawmakers said, are needed to alleviate Florida’s sky-high automobile insurance rates.

Central to those efforts has been doing away with Florida’s “no-fault” provision, which requires motorists to carry $10,000 in “personal injury protection” coverage. That coverage pays the insured medical and funeral costs regardless of who was at fault in the accident. (Contrary to popular belief, “no-fault” does not mean fault is not assigned in an accident.)

Florida’s laws are considered outdated, however. That $10,000 minimum hasn’t changed since Florida became a “no-fault” state in the 1970s. Florida is also one of just two states that doesn’t require motorists to carry bodily injury coverage.

Lawmakers believe that requiring motorists carry more insurance will reduce premiums.

Under the bill lawmakers are considering this year, personal injury protection coverage and Florida’s “no-fault” provision would go away.

Instead, motorists would be required to carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person and $50,000 in coverage for the injury or death of two people. Unlike “personal injury protection” coverage, the insurance for the person at fault in the accident would pay out.

Since most insured Floridians already carry at least $25,000 and $50,000 in bodily injury coverage, their rates would likely go down, lawmakers say.

“Florida is out of step with almost every state, and yet your car insurance rates and premiums keep going up,” said Rep. Erin Grall, R-Vero Beach, who has been pushing for an overhaul for the last several legislative sessions, on Monday. “I believe it’s incumbent upon us to make sure that people have adequate coverage.”

An estimated 35 to 45 percent of Floridians don’t carry that much coverage today, however, and those people would likely see rates increase.

For that reason, lawmakers’ strategy of reducing rates could backfire, insurers warned last week.

One of the reasons why Florida’s rates are so high is because nearly one in five motorists carry no automobile insurance at all — one of the highest ratios in the nation.

Many of those people are believed to not carry coverage because it’s already too expensive. If Florida increases the minimum coverage, it could cause even more people to drop coverage altogether, insurers told lawmakers.

Grall disputed that idea last week. She said many people don’t carry auto insurance not because they don’t earn enough to afford it, but because they’re bad drivers and have automatically higher rates.

“The least amount of coverage can be a result of a poor driving record,” she said. “I don’t necessarily see it as related to somebody’s socioeconomic status.”

Florida has not done any independent study of the bill, causing angst among several Republican lawmakers. The current version of the bill was released two weeks ago, leaving lawmakers little time to vet it before the legislative session was scheduled to end on Friday.

Grall pointed to a 2016 report by the Florida Office of Insurance Regulation that projected drivers on average would see a 5.6 percent savings with a shift to a bodily-injury coverage requirement.

But a 2018 study by the actuarial consulting firm Milliman showed a potential average increase in premiums of $67, or a 5.3 percent increase.

The News Service of Florida contributed to this report.

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