Florida drivers are required to carry Personal Injury Protection (PIP)
coverage as part of their auto insurance policy under the state’s
no-fault system. However, many lawmakers feel Florida is long overdue
for an alternative to the no-fault system.
This year, Florida legislators have been examining the possibility of eliminating
PIP coverage. The alternative is to institute a tort system under which
drivers would be required to carry minimum levels of bodily injury (BI)
liability coverage and at-fault drivers would be financially responsible
for injury-related expenses resulting from their accidents.
The term “no-fault” stems from the Florida statute established
to provide any covered driver injured in a
car accident with up to $10,000 in immediate medical benefits. This is the $10,000 in
personal injury protection (PIP) that all drivers are currently required
to carry on their automobile insurance policies. PIP coverage supposedly
makes each individual responsible for his/her own injuries and medical
bills connected with an accident, regardless of fault. The idea behind
requiring PIP coverage was to have each driver’s own insurance coverage
pay for the first $10,000 in medical bills and lost wages from an accident
regardless of who was at fault, ideally unburdening the civil court system.
Unfortunately, the plan to use the PIP system to unburden the courts simply
did not pan out as the lawmakers envisioned.
Now, state legislators are recognizing that the PIP system is broken and
many are admitting that no-fault insurance may be causing more harm than good.
“If you have been here very long at all we have dealt with this issue
every four or five years with the view that next time there ain’t
going to be any next time,” explained Florida Senate Banking and
Insurance Committee Chair, Republican
Bill Simmons. He also added that last year’s reforms were the best solution option
possible for the current system.
Senator Simmons is now proposing that the current no-fault law that calls
for drivers to carry $10,000 in PIP coverage be replaced by a plan that
calls for drivers to have $10,000 in property damage insurance and $25,000
in bodily injury coverage per person for a total of $50,000 per occurrence.
No-fault claims would be eliminated and personal injury claims would be
filed against at at-fault driver’s insurance or taken to civil court
for large claims.
Insurance representatives offered tentative support but expressed concerns
over pricing and the possible consequences of moving to a tort system.
However, most drivers who finance or lease their vehicles are required
by the lender to carry much higher bodily injury limits already. In theory,
simply dropping the PIP coverage requirement would lower those drivers’
premiums, effectively lowering premiums for the majority of working drivers.