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Will DeSantis end Florida’s ‘no-fault’ auto insurance laws?

If it becomes law, every motorist will need a new insurance policy next year.
Traffic is seen going westbound on the Howard Frankland Bridge on Thursday, June 3, 2021 in Tampa
Traffic is seen going westbound on the Howard Frankland Bridge on Thursday, June 3, 2021 in Tampa [ LUIS SANTANA | Times ]
Published Jun. 24
Updated Jun. 25

TALLAHASSEE — Gov. Ron DeSantis has toured the state over the past month touting a wave of conservative legislation recently passed by state lawmakers.

But he’s been mum on an outstanding bill that would affect more Floridians than any of those policies.

DeSantis has yet to take action on a measure that would require every motorist in the state to get a new automobile insurance policy next year.

Senate Bill 54, passed overwhelmingly by lawmakers in April, would do away with Florida’s status as a “no-fault” state and require a higher amount of minimum coverage on each vehicle — the most sweeping changes to the state’s automobile insurance laws in 50 years.

Related: Florida lawmakers move closer to overhauling auto insurance policies, despite warnings

Although lawmakers had little debate while passing the legislation, DeSantis has faced increasing pressure in recent months not to let it become law.

Insurance companies have warned it will lead to even higher premiums in a state that already ranks among the five most expensive states for automobile insurance. Attorneys who specialize in the type of personal injury protection litigation that would disappear if the bill becomes law have also given DeSantis at least $265,000 in campaign contributions since April, data shows.

Legislators say the bill is the best chance the state has to reduce auto insurance rates, although they passed it despite no independent study showing its effects. (A 2016 study into a similar bill showed rates going down.)

A study commissioned by the state’s Office of Insurance Regulation and released last week estimated it would lead to across-the-board rate hikes for most drivers.

But proponents of the bill question the new report’s methodology in a few areas. And the report also notes that drivers in Miami-Dade County would benefit the most from the new law, with a potential 6.6 percent decrease on average.

An increase in rates could pose a political liability for the governor. Any increases in premiums would take effect in 2022, during an election year.

State Rep. Erin Grall, R-Vero Beach, who sponsored the bill in the House, met with DeSantis last week urging him to allow the bill to go into effect. The governor has not said publicly what he will do.

“If we don’t do anything — and that’s what I relayed to the governor — rates are going to continue to go up,” Grall said. “It’s time we move on and start to let the ratepayers experience some relief.”

No more no-fault?

Lawmakers passed the bill this year in an effort to rein in the state’s ever-increasing auto insurance costs.

Central to those efforts is doing away with Florida’s nearly 50-year-old “no-fault” provision, which requires motorists to carry $10,000 in “personal injury protection” coverage. That coverage pays the insured’s 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.)

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

The bill passed by lawmakers would do away with “personal injury protection” coverage and end Florida’s “no-fault” provision.

In its place, 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.

Lawmakers said that since most insured Floridians already carry at least $25,000 and $50,000 in bodily injury coverage, their rates would likely go down.

But lawmakers also included a provision that would require insurers to offer up to $10,000 in medical payments coverage — essentially another form of the “personal injury protection” coverage lawmakers did away with in the bill. (The provision was added late in the legislative session in part to appease hospitals and doctors who rely on the current system for guaranteed revenue.)

Although motorists would have the ability to opt out of that medical payments coverage, many won’t, and that could increase costs.

Would rates really go up?

Insurance companies and lawmakers have feared that Florida’s number of uninsured drivers will only increase if the state requires drivers to carry more insurance.

Insurance companies estimate that about one in five drivers are uninsured — the sixth-highest rate in the nation, according to the report released last week — and would rise to 25 percent if the bill becomes law, according to the report.

But that figure is an estimate based on industry data. Florida’s highway safety agency says that 7.5 percent of registered vehicles do not have insurance of any kind.

Sen. Danny Burgess, R-Zephyrhills, who sponsored the bill in the Senate, said that kind of discrepancy was a “fatal flaw” in the report.

“Why is it that 48 other states can successfully have lower rates than we do with bodily injury coverage, but in Florida that’s not possible?” he said. “To me, inaction is worse than action.”

Pressure to veto

Among the main champions of the bill are trial attorneys, who see the opportunity for a new type of litigation in automobile accidents. (Grall is also a personal injury attorney.)

On the other hand, Florida already has the third-highest auto insurance rates in the nation, according to the report, and even insurers have agreed that the current “personal injury protection” system is riddled with fraud.

Insurance companies including Progressive, Geico and State Farm have come out against the bill. And it has faced opposition from doctors and the attorneys who represent them. Some of them have spoken directly to DeSantis about not doing away with “personal injury protection” coverage.

In May, a week after giving $50,000 to DeSantis’ campaign, attorneys from the Plantation-based law firm Daly & Barber (whose website is PIPattorneys.com) posted a photo of themselves with DeSantis on Facebook.

“Doing what we can to save PIP!” they wrote.

Doing what we can to save PIP! #SavePIP #VetoSB54

Posted by Daly & Barber, P.A. on Friday, May 7, 2021

Attorney John Daly said Thursday that the firm, which represents hundreds of medical providers, did not give DeSantis money because of the bill; they also supported his 2018 run for governor, he said.

DeSantis did not tell them whether he would veto the bill, but Daly believes it won’t become law.

“I think DeSantis is a very logical guy, and I think it’s a very illogical bill,” Daly said.

“If you’re going to overhaul the entire auto insurance industry in the state of Florida, that’s a major, major process,” he added. “And to put this all into place in the next 5 to 6 months, it would be a shocking thing.”

Correction: The automobile insurance bill passed by lawmakers would go into effect Jan. 1 if Gov. Ron DeSantis signs it. The bill has not been sent to him. An earlier version of the story gave an incorrect effective date.