Auto insurance in Florida hasn’t changed much since 1971. That’s when the Sunshine State adopted a no-fault system whereby every driver was required to purchase a $10,000 PIP (personal injury protection) policy to cover them in case of an auto accident.
This year that may be changing. For many years, PIP critics have been clamoring for change arguing that the system benefits the insurance industry and doctors. Until this year, PIP has never really been threatened. However, legislators in Tallahassee have indicated a willingness to overhaul the system and introduce a new, “fault” system in which drivers would have to carry a $25,000 insurance policy to cover accidents in which they were involved and caused injury.
Rep. Erin Grall is sponsoring a bill that would do away with PIP and raise bodily injury coverage to $25,000 a person and $50,000 per incident. Bodily injury would be required before registering a vehicle.
“We can bring meaningful value into a system that places fault appropriately on the person who caused the accident,” Grall said.
Florida’s PIP law has long been blamed for insurance fraud. It’s been revised several times since 2000 to try to curb “bad faith claims.” But those reforms have also restricted coverage.
Grall’s bill made it out of its first committee, but it still faces an uphill battle. Similar legislation is also filed by Senator Jeff Brandes, Senator Tom Lee and Representative Bill Hager.
Under the House plan, the vast majority of drivers who already pay for bodily injury coverage would see their bills drop by an average of $81 a year, or $6.67 a month.
That same plan, however, would drive up costs by an average of $250 a year for those who carry only the bare minimum of insurance required by law. Under a Senate plan, these drivers would pay nearly $323 more a year.
The insurance and medical lobbies are powerful forces in Tallahassee. It will be interesting to see how this shakes out.