Tallahassee takes aim again at no-fault automobile insurance

The latest effort to end Florida’s no-fault auto insurance system will get its first Senate hearing next week.

The Senate Banking and Insurance Committee on Jan. 26 will take up a proposal (SB 54) introduced late Friday by Sen. Danny Burgess, R-Zephyrhills. The proposal seeks to replace the requirement motorists carry personal-injury protection coverage, which is key to the no-fault system, with mandatory bodily injury coverage.

Senate President Wilton Simpson, R-Trilby, who is backing the elimination of no-fault, said personal-injury protection coverage is “outdated” and doesn’t protect consumers.

“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause the bodily injury or death of another person while operating a motor vehicle,” Simpson said in a statement Friday.

Under the no-fault system, drivers are required to carry personal-injury protection, or PIP, coverage to help pay medical bills after accidents. Motorists are required to carry $10,000 in PIP coverage, an amount unchanged since 1979. Lawmakers in both chambers have floated the idea of ending the no-fault system almost annually since trying to reform PIP in 2012.

Burgess’ proposal would mandate that motorists carry a minimum of $25,000 in bodily injury coverage for the injury or death of one person and $50,000 for injuries or deaths of two or more people. The proposal also would retain an existing $10,000 financial responsibility requirement for property damage.

Insurers would also be required to offer medical payments coverage starting at $5,000, with deductibles up to $500.

A 2016 report by the Florida Office of Insurance Regulation projected that drivers would see a 5.6% savings by shifting to a bodily-injury coverage requirement. But a study two years later by the actuarial consulting firm Milliman showed an average increase in premiums of $67, or a 5.3% increase.

Burgess’ proposal would also set up a framework for “bad faith” lawsuits, which involve allegations that insurers have not properly looked out for the interests of their customers. Disputes about the bad-faith issue have stalled past legislative efforts to end the no-fault system.