Your car insurance could go up $200 — or more — if no-fault system is repealed

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Auto insurance premiums will increase by an average of $202 for Florida drivers — and far more for those who buy the minimum coverage — if Gov. DeSantis signs a bill that would repeal the state’s decades-old no-fault insurance system, according to a new analysis.

The 40% of drivers who currently buy the cheapest coverage allowed by law will see the sharpest increases — as much as 77%, the analysis said. But those increases would be lower for South Florida motorists, where current auto insurance rates are already among the highest in the nation.

The analysis, commissioned by the Florida Office of Insurance Regulation, was conducted by Pinnacle Actuarial Resources but not released before the Legislature voted to repeal Florida’s long-time no-fault insurance law in April.

After taking no action on repeal proposals in previous years, the Florida House passed this year’s bill 99-11 and the Senate passed it 38-1.

Florida’s no-fault law requires drivers who want to legally register and tag their vehicles to purchase personal injury protection policies — or PIP — that provide up to $10,000 for their own medical, disability and funeral expenses, regardless of whether the other driver has insurance.

The bill would eliminate the PIP requirement and require drivers to buy coverage that would pay for medical care for occupants of the vehicles they hit — at least $25,000 per occupant and $50,000 per incident. It would require motorists to buy a $5,000 death benefit and provide an option to buy at least $5,000 in personal injury coverage.

The Pinnacle report found that effects of a no-fault repeal would be minimal for drivers with full coverage, particularly if they decide not to replace their $10,000 PIP coverage with the same amount of optional personal injury coverage.

The report breaks the costs down like this:

  • Drivers who already carry bodily injury coverage of $25,000 per person and $50,000 per incident would see their annual premiums increase 1.5%, from $1,522 to $1,545. Those drivers would see their premiums decrease by 0.6% in Broward County and 6.6% in Miami-Dade County, while increasing by 5% in Palm Beach County.

  • For Florida drivers who currently buy just the minimum $10,000 PIP coverage, their cost increase will be dramatic — 48.3% more if they reject the optional medical coverage and 77.2% more if they opt for $10,000 in personal injury medical coverage.

  • In Palm Beach County, drivers who reject the optional medical coverage and buy the minimum liability coverage would see their annual premiums increase by 60.7%, from $637 to $1,024.

  • In Broward County, drivers would pay 38.8% more, from $686 to $952.

  • In Miami-Dade, drivers selecting minimum coverage would see a 22.5% increase, from $677 to $829.

In other states where it’s available, a majority of drivers choose personal medical coverage because it covers costs that normal health insurance with deductibles would not cover, the report said.

To maintain the $10,000 in personal injury coverage, drivers now paying the minimum would pay an average of 77.2% more statewide — from $585 to $1,037.

In South Florida, those drivers would pay:

  • 91.9% more in Palm Beach County ($637 to $1,223).

  • 72.1% more in Broward County (from $686 to $1,181).

  • 55.6% more in Miami-Dade County (from $677 to $1,053).

Opponents of the law have been urging DeSantis to veto the bill, but the Legislature has not yet sent the bill to his desk.

DeSantis’ press office did not respond to requests for comment about the issue.

Arguments on both sides

Supporters of the bill include the Florida Justice Association, a trade group of plaintiffs attorneys, who say the current $10,000 minimum medical coverage requirement is not sufficient to cover most hospital visits.

Plaintiffs attorneys contend the repeal would reduce rampant PIP fraud, reduce auto insurance premiums, and create a more equitable system in which drivers that cause injuries will be held responsible to those they injure.

“The repeal of no-fault is past due,” said Michael Steinger, founding partner at Steinger, Greene & Feiner, a law firm with offices throughout the state. “It is time to reduce premium costs and end the fraud and abuse that has caused Florida to have the third highest auto insurance rates in the country.”

Opponents include the American Property Casualty Insurance Association, which says trial attorneys want it because it creates more opportunities for lawyers to file lawsuits claiming that insurers acted in “bad faith” in responding to claims. During the legislative session, the association warned of steeper increases — $860 a year for the 40% of drivers who buy the minimum coverage.

Michael Carlson, president and CEO of another insurance trade group, Personal Insurance Federation of Florida, says provisions in the bill limiting “bad faith” lawsuits don’t actually change what state Supreme Court rulings currently allow. “It’s a step backward,” he said.

Carlson said the state’s already large percentage of uninsured motorists — estimated at about 20% — would increase if the repeal becomes law. Costs of uninsured motorist coverage would then swell, adding to costs for motorists who buy more coverage than what’s required, he said.

“We don’t want to raise rates unnecessarily and certainly not on those who can least afford it — the millions of ‘street legal’ drivers. We don’t think it’s fair to the working folks who cannot afford to pay more,” he said.

The Consumer Protection Coalition, an offshoot of the Florida Chamber, says the repeal fails to reduce premiums, reduce litigation, or limit government-mandated coverage requirements — three goals the organization said must be met before it would support PIP repeal. The coalition has spearheaded a letter-writing campaign urging DeSantis to veto the bill.

Medical providers oppose the change because the current PIP law guarantees them some payment for treating crash victims.

Analysis questioned

Supporters and opponents of the bill questioned the reliability of cost projections in the Pinnacle analysis.

Carlson said it fails to account for a last-minute change to the bill requiring motorists to buy the $5,000 death benefit. As a result, rate increases will be higher than projected, he said.

Steinger said the analysis was based on 2014 data and underestimates increases in insurance costs and claims since then.

Pinnacle’s analysis found that, because of the amount of PIP losses that would be eligible for non-economic, or “pain and suffering,” claims under a so-called at-fault system, claims for bodily injury coverage would drive up costs by 45%.

While Florida’s law is called “no-fault,” the reality is that at-fault drivers are really only held blameless if the occupant they hurt suffers minor injuries that require minimal medical care.

If serious injuries occur, the injured driver can sue to recover medical costs that exceed the limited payout provided under PIP.

That’s why many Florida drivers, particularly if they have assets to protect, opt for full coverage that includes coverage for injuries caused by uninsured motorists, damage to the other vehicle, and for injuries to occupants of the other vehicles. They might also purchase comprehensive and collision insurance to cover repairs to their own vehicles.

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