The 2021 Florida legislative session will be known as having accomplished a long-standing goal of the automobile insurance industry - repeal of Florida's PIP law which had been under attack for years - and undoubtedly the subject of conversations between Florida legislators and well-financed insurance lobbyists.
"PIP", or Personal Injury Protection coverage was originally enacted to ensure that injured drivers could obtain immediate medical treatment caused by automobile accidents without the need to pursue a claim against the "at-fault" driver. Coverage was mandatory for all vehicles registered in Florida for $10,000.00. While lawsuits were and are still filed, they often take years to resolve. That didn't help injured drivers facing medical bills from the emergency room to follow-up medical providers.
The major criticisms of the no-fault system was that it encouraged fraud, either by unscrupulous doctors or those who conspired to "fake" accidents and thereafter obtain benefits. Did some fraud occur? Most certainly. However, the insurance companies were given the authority to closely scrutinize the medical care provided to their insured drivers and even require the insured to be examined by their own doctors to make sure the treatment was necessary and related to the accident. If they determined it was not, benefits could be terminated.
Insurers also often complained about the cost of treatment under PIP coverage, especially because the insurer could not recover their costs from any settlement which might be obtained from the at-fault party.
While under the old law Florida drivers needed to obtain both PIP coverage and liability coverage for property damage, until this year, liability coverage for bodily injury to others was NOT mandatory. This was sheer lunacy, and the reason why anyone who previously chose to drive on Florida streets should have purchased uninsured motorist coverage if at all possible. For years, statistics revealed that Florida had more uninsured drivers than most other states.
Logically, Florida law should have required mandatory bodily injury coverage in addition to PIP coverage. This however was not the intent of the insurance industry and their lobbyists. As a result, the 2021 legislative session resulted in the passage of SB 54.
As enacted, SB 54 eliminates mandatory PIP coverage while requiring drivers to purchase a minimum of 25/50 bodily injury coverage. Initially the law would have also required $5,000.00 in "MedPay" coverage - similar to PIP except that the insurance company could seek reimbursement from the at-fault driver for benefits paid. The Med Pay provision was made voluntary under the final bill.
Among the loudest selling points pushed by the insurance industry was that insurance rates would go down if PIP was repealed. A number of insurance watchdog agencies have expressed skepticism, and in fact believe that insurance rates may actually rise over time. Personally I am as skeptical of politicians who promise that taxes will go down if we just give them our vote.
I also have concerns about what this change will do to health insurance rates. Previously, both public and private health insurers were not responsible for accident-related treatment until the $10,000.00 in PIP benefits were exhausted. They are now technically on the hook from the first dollar. I suspect health insurance premiums will be affected, and not in the insured's favor.
Listen, the addition of mandatory bodily injury liability coverage was long overdue. The problem is, did it have to be enacted at the expense of the benefits that PIP coverage provided Florida's drivers? Stay tuned to see if automobile insurance rates truly do go down or like many other laws past under the intense pressure of lobbyists, put more money in the business coffers while leaving the consumer to foot the bill.
Should you have any questions about changes in auto insurance law, or have been injured in an auto accident and are unsure about your rights, please contact me at my offices in St. Petersburg at 727-822-3700 for a no-cost consultation.