6 Common Misconceptions About Florida's No-Fault Insurance System

Florida is one of 18 states that require motorists to purchase no-fault insurance, and yet even with 16 million drivers on the roads, many don’t really understand what this type of coverage entails. In fact there are plenty of incorrect assumptions and plain wrong proclamations made about it – which can lead to undesirable issues in the event that a claim needs to be made.

So with that in mind, let's clear the fog and break down some facts about the no-fault insurance as it exists in Florida at the moment.

Clarifying coverage concerns

No-fault insurance is basically designed to streamline the process of financial recovery after an auto accident—regardless of who caused it. Originally rolled out in the 1970s, it remains enforced to this day, although there was a brief dalliance in the late 2000s when it was put on hold. The fact that this decision was swiftly reversed shows just how effective it can be. Here's what it covers in Florida:

• Medical Expenses: Bills for treatment related to the car accident are typically covered up to your policy's limit.
• Lost Wages: If you're unable to work due to injuries sustained, partial reimbursement can be expected.
• Death Benefits: In the tragic event of a death, the policy provides compensation to beneficiaries.

In spite of this, determining who's at fault in a car accident in Tampa or elsewhere in Florida may still play a role outside of no-fault claims. For example, if damages exceed policy limits or there are severe injuries involved, fault can influence legal proceedings against the responsible party.

There are some other mitigating circumstances and imperfectly understood aspects at play here, including:

• Property Damage Liability (PDL): Contrary to popular belief, PDL is not part of no-fault coverage and is instead used when you're responsible for damaging another person’s property.
• Fault Matters for Serious Injury: As mentioned, if serious or permanent injury occurs, stepping outside the no-fault system becomes possible—and necessary—to pursue additional compensation.
• Coverage Limits Apply: Your no-fault insurance has clear limits; expenses beyond this threshold fall back on you unless further action is taken. The minimum sits at $10,000, so seeking higher levels of coverage is sensible for most people.

More misconceptions of no-fault insurance protection scrutinized

Assumption is the mother of all mistakes, and even if you think you’re up to speed with the specifics of your mandatory no-fault insurance policy, knowing the following will put you in the strongest position:

• Coverage is Immediate, Not Absolute: This type of policy covers immediate medical expenses and lost income but is not a blanket policy for all accident-related costs. So if there are ongoing, life-changing expenses brought about by an auto accident, no-fault packages alone might leave you in financial dire straits.
• No Choice in Coverage: Many assume the no-fault system offers no flexibility. In reality, drivers have options for additional coverage to better protect themselves against various contingencies. This should include robustly chosen health insurance, as well as critical injury cover for working people.
• At-Fault Parties Remain Unaccountable: Contrary to this belief, no-fault insurance does not eliminate the repercussions for those who cause accidents; they can still be liable for damages that exceed no-fault policy limits.

Concerns to consider

Official stats show that there are around 400,000 crashes in Florida each year, resulting in 3,400 fatalities and over a quarter of a million injuries. This should be enough to convince drivers to go above and beyond the bare minimum of no-fault insurance to shield themselves from the fallout of an auto accident.

There’s also the issue of fraud that this type of cover creates, and it’s not just isolated to Florida; up in New York insurance premium price increases of over $200 million are associated with fraudulent claims on no-fault policies.

That said, information is empowering, so learning all you can about the policies you pick, and reading the small print as well as seeking legal representation after a crash will serve you well.

Wrapping up

It doesn’t look like no-fault insurance will be going anywhere in the near future, in spite of calls for reform. Thus reading up on these basics and being savvy about your rights, as well as your obligations, is a must if you want to drive in Florida.