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Finding a Replacement for Florida’s Current PIP Insurance

car accident

Florida’s current car insurance system is costing the state’s residents millions in extra premiums, according to many news reports. They are also claiming that current efforts to fix the system have only lead to higher premiums in recent years. That is why a Vero Beach legislator is introducing legislation that would replace the current no-fault car insurance system with one that requires drivers to buy bodily injury coverage.

Auto insurance in Florida today is no fault. Each licensed driver in the state of Florida must carry PIP (personal injury protection) insurance. This insurance covers medical payments for the driver and any passengers in the driver’s car. It does not cover medical payments for any other drivers or passengers involved in the same accident. This system is meant to insure that everyone in the accident has coverage, no matter who is at fault.

The problem with the current insurance system is that the costs of the premiums keep going up, though coverage remains the same. Florida requires drivers to have $10,000 in PIP coverage. The coverage has not changed in decades, but premiums have gone up significantly over the past few years.

The insurance also requires drivers to pay for accidents they didn’t cause. All drivers have to deal with rate hikes, because rates are based on PIP premiums in the region, not on driving record. Even if a driver has adequate medical insurance in place, they still have to pay for duplicate coverage in the form of PIP insurance.

The Proposed Solution

The proposed legislation would repeal the PIP requirement and replace it with a requirement that drivers purchase bodily injury coverage instead. Under one version of the bill, the coverage would be $25,000 per person with up to $50,000 for the entire accident. Other versions have different coverage levels.

Proponents of the legislation say that the change would lower insurance premiums, up to $1 billion statewide each year. It would also assign fault to the driver who caused the accident. That driver would bear the consequences of higher premiums, instead of all drivers in general. It would provide the same or better coverage in many cases, while simplifying the entire system.

The biggest opponents to the change are representatives of the healthcare industry. They like PIP coverage because it guarantees payment to the healthcare provider. With bodily injury coverage, there is no such guarantee. An at-fault driver without health insurance could get emergency health treatment but not be able to pay the bill.

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