Florida lawmakers are slated to begin considering whether to repeal the state’s long-standing no-fault auto insurance requirement. On average, this additional protection costs drivers about $81 per policy, according to recent research. The question legislators have to decide is whether those savings are going to be worth it in the end due to the fact that it will likely result in an uptick of car accident lawsuits.
The no-fault insurance for motor vehicles allows that there is “no-fault” when it comes to paying out an auto insurance claim following a car accident under a certain amount. Instead, drivers are required to carry personal injury protection (PIP) coverage, which extends payment for any medical expenses and certain non-medical costs associated with the crash, such as lost wages or replacement benefits (i.e., having someone come help you clean your house while you are unable to do so). All Florida drivers are required to carry a minimum level of PIP benefits in addition to liability insurance requirements. Then if they are involved in a crash, they file a claim with their own auto insurer. The only way they can pursue a claim outside that no-fault system is if the injuries are considered permanent or permanently disfiguring/ scarring or if there is some significant or total loss of an important bodily function. Drivers have to carry at least $10,000 in PIP benefits.
Legislators have decided that in the spring, they will mull a proposal to scrap the no-fault insurance law that has been followed in the state since the 1970s.
The intended purpose of PIP was to offer a base-level of support – particularly for medical expenses – for people who were injured in a Florida car accident, no matter who was at-fault.
However, costs of insurance in recent years have soared, even in the face of state-level reforms passed five years ago to help cushion the added expenses the insurance industry attributes to fraud. Although those measures did reduce the PIP rates by about 14.5 percent between 2013 and 2014, they have unfortunately risen nearly 26 percent between 2015 and 2016.
Industry insiders say there are several reasons for this, including:
- Higher costs for medical treatment.
- Drivers who are traveling greater distances/ more miles on average.
- More motor vehicle crashes.
Drivers in Florida pay the fifth-highest monthly premiums for auto insurance in the country, according to the Office of Insurance Regulation.
The proposed bill to end no-fault insurance in the Sunshine State was introduced by Sen. Jeff Brandes, R-St. Petersburg, who asserts that by moving from a no-fault state to a tort state, the onus to cover the cost of treatment and/or property damage would fall on the driver who was to blame for the crash. Of the 38 tort states, all except one also requires drivers to purchase bodily injury liability insurance. There are some raising questions about how much voters are actually going to save when they have to turn around and buy this other type of coverage. Some of those pushing for repeal want to require drivers to purchase a minimum of $25,000 in bodily injury coverage per persona and $50,000 per occurrence.
Health care organizations urge lawmakers not to repeal, arguing PIP is essential to some 2.6 million residents who don’t have health insurance, should they be involved in a motor vehicle accident.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Lawmakers to weigh costs, benefits of no-fault insurance repeal, Jan. 24, 2017, By Ron Hurtibise, Sun Sentinel
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