Florida Continues Debate on Eliminating No-Fault Insurance System

William E. Johnson
November 13, 2013

Last year Florida implemented reform to curb fraud in it's no fault car insurance system. These reforms were upheld by the Florida Court of Appeals last month. However, the debate whether to keep or scrap the no-fault insurance system continues.

Legislative Initiative Seeks to Scrap the Fault System

Two bills have been introduced in the Florida legislature to replace the no-fault Personal Injury Protection (PIP) coverage with bodily injury liability insurance. The bills, HB 267 and HB 269, would require motorists to purchase bodily liability insurance, thus reinstituting the traditional fault system of auto insurance already in place in most U.S. states.

However, big insurance companies have been spending a great deal of effort in opposing the bills. On November 5th the Personal Insurance Federation of Florida, representing insurers like Progressive, State Farm, and Allstate argued that it is too early to decide whether to scrap the no-fault system. The recently implemented reforms, the insurers argue, will likely result in a significant decrease in fraud, which will be passed along as savings to consumers.

Denied Claims

However, many remain skeptical of the reform’s ability to reduce premium costs. Critics say that these reforms, which limit the amount of emergency benefits consumers may obtain and shorten the timeframe with which a consumer may file a claim, unduly burden the consumer in favor of lowering costs for auto insurers. Although the reforms are now in full swing, the insurers do not have to lower rates until 2014, and even then they need only submit an explanation as to why rates were not lowered. Meanwhile policy holders are currently being denied the right to make claims for non-emergency services that they had previously been able to.

Florida’s PIP System Should be Scrapped in Favor of Mandatory Bodily Injury Coverage

The PIP system in place today favors insurers. The traditional system’s requirement that drivers at fault pay provides a natural disincentive to fraud because it puts the insurance company on guard to ferret out fraudulent claims from both its own and third parties. Further, no-fault insurance limits, originally designed to reduce the amount of litigation, may spur an increase in litigation because drivers may not be able to receive the non-emergency benefits that they need due to last year’s PIP reform. In light of these challenges PIP should be abolished in favor of bodily Injury coverage. This will ensure that the person that causes an accident has coverage to protect any innocent victims, regardless of whether the innocent party carried insurance.

West Palm Beach Car Accident Lawyer

If you have been injured in a Palm Beach County traffic accident contact the personal injury attorneys of the Law Offices of William E. Johnson, P.A. Our attorneys are auto injury experts and can help you get any amount of recovery entitled to you under the law. Schedule a free consultation by calling 561-832-4848 today.