What if the Auto No-Fault Law Expires in Florida.

June 1, 2007
Gaurav Bhola, MSM, managing editor

Auto insurance companies might have an early Christmas present this year in Florida.  Some of the state's insurers are preparing to lower consumers' auto insurance premiums now that Florida's no-fault insurance law is set to expire on Oct. 1, while others say they may continue providing the controversial coverage. Last month, the Florida Legislature ended the regular session without sustaining the no-fault coverage law. Motorists are required to carry such insurance.  But Florida Governor Charlie Crist and some lawmakers have given indications when the legislature returns this June for special session; they might work to retain the law. 


Florida is one of 12 no-fault auto insurance states. The expression "no-fault" refers to any auto insurance program that permits policyholders to recoup financial losses from their own insurance company, irrespective of fault. Though in exacting practice, no-fault applies not only to the payment of no-fault first-party benefits but restricts the right to sue, a “limited tort” option. Personal injury protection (PIP) is another name for first party benefits coverage.  Under existing no-fault laws, motorists can attempt to recover damages through legal avenues for pain and suffering and severe injuries, if certain conditions are met. These conditions or thresholds may be stated in fees for medical bills (monetary threshold) or in verbal terms, a descriptive/verbal threshold.  In Florida, the law requires motorists to get $10,000 in personal injury protection coverage.

But if the law is not renewed, drivers will be able to drop the coverage in exchange for a lower rate or may have the option of retaining the coverage.  Herein, motorists who cause accidents will have the onus to pay for injury damages and those injured would be able to sue for monetary damages.  One of the largest providers of auto insurance, State Farm has stated that if the law is allowed to sunset, drivers could see their rates drop by as much as 16 percent. 

Other insurers, such as Nationwide Insurance Co., are waiting on the fence awaiting special session of the house before making any changes in their services.  Insurers are lobbying hard to keep the law from being extended because it costs them millions of dollars in fraud each year.  Florida’s healthcare facilities may lose upto $350 million if the coverage expires.  The legislature tried earlier to reform the law to make it more difficult to attempt fraud but the bill died a slow death.  So it seems Floridians will know in June which side of the fence they will be on.


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