Florida Car Insurance Could Change Drastically Under New Law

Florida has long supported mandatory personal injury protection for drivers. The insurance helps support Florida’s current system in which neither party can be blamed. It’s a “no-fault” system. New legislation poised to make its ways into law would replace the personal injury protection with mandatory bodily injury coverage instead. Sound like the same thing? It’s not. Here are the key differences you should know about when the law passes.

First, it would effectively eliminate the no-fault system. Humans prefer to place blame, so that’s where the new system would be headed. This would also make it easier to mount personal injury lawsuits after car accidents in Florida. But the point is actually to decrease litigation.

The proposal, HB 771, is on its way to the House after passing through the House Commerce Committee in a 17-7 vote.

One of HB 771’s sponsors, Erin Grall (R-Vero Beach), said, “That is massive, that is tort reform.”

She was talking about the increasing rate of fraudulent cases that have resulted in pricier insurance rates: “They have increased year over year, sometimes as much as 50%, depending upon the carrier,” she said. “We can talk about the fact that rates will increase if we transition the systems. But rates are going to increase because of the severity, frequency and cost of living that we see in the state.”

The previous personal injury coverage was only a mandatory ten grand, which Representative Matt Willihite (D-Wellington) said was “laughable.” His wife had been in an auto accident only two months prior, and the bills far exceeded the amount of mandatory PIP. “My first brush at the hospital and the emergency services bill exceeded $28,000,” he said. “I haven’t gotten to the car repair yet.”

Opponents of the new bill say that rates could skyrocket, a big concern for Florida residents who are already struggling financially. Representative David Santiago (R-Deltona) said, “In Florida, I think the study I read, one in eight are uninsured. And could this potential increase, if it does have an increase, cause more to go uninsured?”

And that’s a legitimate concern. The entire point of insurance is that as many people are included in the pool as possible. When those rates increase to the point that many people cannot afford them, fewer people are included in that pool as a result, and the cycle inevitably gets worse and worse until the system cannot sustain itself. 

Others think the risks could be worth the rewards, but that improvements can and should be made before it passes. Representative Anthony Sabatini (R-Howey-in-the-Hills) said, “I think we need guardrails on the bill.”