Florida’s “no-fault” auto insurance system is a mess, an incubator for fraud and abuse that serves neither ratepayers nor injured motorists. But the change that lawmakers cobbled together in the closing hours of the recent legislative session was a rushed response driven by frustration, not informed policymaking. Gov. Ron DeSantis should veto SB 54 and urge lawmakers to negotiate reforms next year that clearly promise to improve the system.
The bill — approved 37-3 by the Senate and 100-16 in the House — capped years of legislative efforts to revamp a system rife with fraud, high policy rates and massive noncompliance. Lawmakers ended the requirement for carrying so-called Personal Injury Protection, or PIP, coverage, which pays for an insured person’s injuries sustained in an accident regardless of who was at-fault. Instead, they mandated bodily-injury coverage, which pays for injuries caused by the insured driver. Florida is one of just two states that don’t require some level of bodily-injury coverage. Advocates said the change was needed to ensure that more drivers were sufficiently insured, and they predicted that wider coverage would lower rates by bringing more consumers into the market.
The $10,000 in PIP coverage, established in 1979, has not kept pace with the times. And while a “no fault” system was envisioned as a way to reduce costly litigation in accident cases, the PIP limits have also been blamed for fraud and excessive medical billing. Bill proponents argue that most drivers already have the required levels of bodily-injury protection — $25,000 for the injury or death of one person in an accident and $50,000 for injuries or deaths of two or more people. But opponents, including Sen. Jeff Brandes, R-St. Petersburg, say the plan will be a financial burden for Floridians who currently carry only PIP. Critics fear the added costs could prompt more Floridians to drive without any insurance.
Senate bill sponsor Danny Burgess, R-Zephyrhills, cited a 2016 report by the Florida Office of Insurance Regulation that projected drivers on average would see 5.6 percent savings with a shift to a bodily-injury coverage requirement. A 2018 study by the actuarial consulting firm Milliman showed a potential average increase in premiums of $67, or a 5.3 percent increase. That’s in line with an outlook by the American Property Casualty Insurance Association, which estimated costs would increase 3 percent to 6 percent because of the legislation’s “lack of meaningful” litigation reforms.
The impact to consumers, and on the population of insured motorists, is critical. Yet the Florida Senate passed its 2021 bill without any updated, independent analysis on the effects it would have on the state’s already-high premiums, which rank among the highest in the nation. Rates for the poorest motorists would likely increase because they would be required to carry additional coverage. About one in five Florida motorists goes without insurance already. And those numbers are higher in dense metropolitan areas, which are choked with traffic. Floridians gain nothing if a bill to expand the pool of insured motorists actually drives people from obtaining coverage.
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Lawmakers had plenty of time during the two-month session to reform “no fault” in a thoughtful way. The flawed bill that was rushed through is a perfect example of what happens when legislators waste their time on hot-button social matters instead of pocketbook issues of great public concern. The governor should veto the bill and give legislators time to produce an updated analysis on changing the law. Motorists need to be adequately insured, consumers need to be protected, and more — not fewer — drivers on Florida’s crowded roadways need to be covered. SB 54 doesn’t accomplish this delicate balancing act.
Editorials are the institutional voice of the Tampa Bay Times. The members of the Editorial Board are Editor of Editorials Graham Brink, Sherri Day, Sebastian Dortch, John Hill, Jim Verhulst and Chairman and CEO Paul Tash. Follow @TBTimes_Opinion on Twitter for more opinion news.