Florida no-fault repeal advances with no certainty it will lower auto insurance rates

Florida’s 16 million drivers pay the nation’s highest auto insurance premiums

By John Haughey | The Center Square

For decades, Florida lawmakers have pondered bills seeking to repeal the state’s half-century-old no-fault auto insurance system.

They’ve perennially failed because there’s no certainty a repeal would lower Florida auto insurance rates.

There still isn’t, at least according to the insurance industry, but nevertheless, Florida’s 16 million drivers, who already pay the nation’s highest auto insurance premiums, may learn the answer to that long-debated question next year.

After a 39-minute discussion, the Florida Senate adopted Senate Bill 54 in a near-unanimous vote Wednesday, sending the repeal to the House, where a similar proposal – House Bill 719 – is one hearing away from the chamber floor.

SB 54, filed by Sen. Danny Burgess, R-Zephyrhills, and HB 719, sponsored by Rep. Erin Grall, R-Vero Beach, would repeal the state’s no-fault law and replace its personal injury protection (PIP) system with a Mandatory Bodily Injury (MBI) system.

Florida’s 1970 Motor Vehicle No-Fault Law requires owners to maintain PIP coverage of $10,000 in medical, disability and funeral expenses, without regard to fault, and subject to a $2,500 limit for non-emergency medical care. In exchange for PIP coverage, vehicle owners are immune from tort claims.

SB 54 would require drivers by Jan. 1, 2022, to secure MBI coverage of at least $25,000 for death or injury of one person, $50,000 for injury or death of two or more people and $10,000 for property damage.

Florida is among states that have no-fault insurance but unlike all others, it doesn’t require motorists to carry MBI. Plus, critics contend, the minimum $10,000 PIP coverage has not increased since 1970.

Proponents say increasing the amount of insurance coverage on Florida roads will lower overall auto insurance rates and say auto insurance rates declined in Colorado after it repealed its Florida-like no-fault PIP system in 2003.

Opponents counter the only state where auto insurance rates have increased faster than those in Florida since 2013 is Colorado … because it repealed its no-fault PIP system in 2003.

According to the American Property Casualty Insurance Association (APCIA), about 40 percent, or more than 6 million, Florida drivers now carry insurance below what would be required under SB 54/HB 719.

The APCIA projects those drivers could see insurance costs increase by $165 to $876 a year if repeal is adopted.

Florida Insurance Commissioner David Altmaier has not endorsed repeal and wants more study. Florida Chief Financial Officer (CFO) Jimmy Patronis has expressed fears rates will rise for “those that can least afford it.”

Sen. Jeff Brandes, R-St. Petersburg, the dissenter in the 39-1 vote, said supporters cannot claim repeal will lower insurance rates “and that isn’t right.”

“You can’t go home, look your constituents in the eye and say, ‘This is going to lower your rates,’” he said. “For your poorest constituents, it may raise their rates 15, 20, 70 percent. We don’t know.”

Supporters hinted no-fault repeal will be signed by Gov. Ron DeSantis and Senate President Wilton Simpson, R-Trilby, gave it his blessing.

“PIP coverage levels are clearly insufficient,” Simpson said. “It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”

Proponents say studies show rates will go down for the majority of Floridians who already carry MBI coverage.

“The key question before us is are the current coverages sufficient, and I think we can all agree they’re not,” Burgess said.

Sen. Doug Broxson, R-Gulf Breeze, warned of “negative potential,” but voted for SB 54 because staying with no-fault is not an option.

“We’re going to try it,” he said. “We’ve been working on this for a while. (Here’s) something we can vote on.”

That’s no reason to adopt legislation affecting 16 million Floridians, Brandes said.

“Nancy Pelosi famously said we have to pass the bill in order to find out what’s in it,” he quipped. “In this case, we have to pass the bill to find out how much it costs. That’s no way for the Florida Senate to do business.”