No-fault car insurance repeal costly move?
Should you care if the Florida Legislature repeals the no-fault auto insurance law that’s been in effect since 1972 and replaces it with one requiring bodily injury coverage?
That depends on how much auto insurance coverage — if any — you currently buy.
The no-fault law is on the verge of joining caged monkeys and backyard citrus trees on “remember when” Florida history websites.
Following the Florida Senate’s passage of the no-fault repeal bill last week, the House Judiciary Committee approved it by an 18-2 vote Monday. The bill next goes to the full House, and if it prevails there, to the full Legislature.
The decades-old law requires drivers who want to legally register and tag their vehicles to purchase policies that provide up to $10,000 for their own medical, disability and funeral expenses if they get hurt in a crash, regardless of whether or not the other driver has insurance.
Many Florida drivers are happy to buy just the minimal level of insurance, but many who understand that they could be sued if their victims’ medical treatment costs exceed that paltry minimum opt to purchase much more coverage.
If enacted, the proposed repeal would require drivers to buy coverage that would cover medical care for occupants of vehicles they hit — a minimum of $25,000 per occupant and $50,000 per incident.
Proponents of the proposed repeal, including the Florida Justice Association lobbying organization for plaintiffs attorneys, note that the $10,000 minimum medical coverage guaranteed by the law hasn’t changed and isn’t sufficient to cover most hospital visits.
The attorneys, who have been pushing the repeal effort for several years, say the change is necessary to bring Florida in line with 48 other states.
The current law is riddled with fraud and “obsolete,” the association contends. Association president Ed Romano said the no-fault law is a “socialized law” in which “responsible drivers are forced to subsidize irresponsible drivers” and forces 86% of Florida drivers who already have health insurance to buy additional health insurance they don’t need.
Repeal opponents, including the American Property Casualty Insurance Association, say the lawyers are pushing for the change because it requires a finding of fault for each crash — creating more targets for the lawyers to sue.
Medical providers as well oppose the bill because the current system at least guarantees some payment for treating crash victims.
Toni Large of the Florida College of Emergency Physicians called on lawmakers to require motorists without medical insurance to purchase at least $5,000 in personal injury coverage. In its current form, the bill would make the extra purchase optional.
Insurers oppose repeal of the no-fault law unless attorneys are also restricted from suing insurers over allegations they acted in “bad faith” in dealing with patient claims. With more targets to sue, attorneys will bring more bad faith claims, insurers claim.
Language in the Senate version includes restrictions of bad faith claims, but insurers on Monday said it was too complicated and left too many loopholes that still allow bad faith claims.
The bill’s House sponsor, Rep. Erin Grall-R, who represents Indian River County and part of St. Lucie County, said lawmakers worked hard to reach a compromise on the bad faith restrictions. Despite it, she said, “It’s just never enough until insurance companies don’t have to be responsive to our own constituents.”
Here’s who will likely be affected most financially if the no-fault law is repealed: ▪ If you’re a driver with something to lose if you cause an accident — i.e. assets or property that could be seized if your victim wins a lawsuit against you — then you’re probably already trying to protect yourself by carrying high levels of liability coverage in addition to the required $10,000 for personal injury coverage.
Whether or not your costs increase if the no-fault law is repealed was subject of debate, but ultimately, lawmakers acknowledged they didn’t have enough data to predict either way.
Proponents contend insurance rates for those already buying more than the minimum required by the new law will likely their rates lowered because they will no longer have to buy the $10,000 personal injury coverage.
▪ If you typically buy the minimum amount of coverage necessary to keep your tags legal — or less liability coverage than the new law would require — your costs will likely increase because you will be required to buy more coverage.
The American Property Casualty Insurance Association released a statement last week projecting that the 40 percent of drivers currently carrying less insurance than the new law would require could see their premiums increase by $165 to $876 a year.
And rather than pay increase rates, repeal opponents fear that drivers who buy the least amount of coverage they can get away with will simply stop buying insurance.
▪ If you are only paying the minimum, opponents of the repeal say they fear you’ll decide to go without insurance rather than pay the increased rates.
They would join the ranks of the 20% of drivers who are uninsured and prowling Florida roads like ticking time bombs — able to offer nothing to compensate victims whose lives might be forever obliterated by their decision to be irresponsible.