DeSantis stands firm against repealing Florida’s no-fault auto insurance law
Governor previously vetoed a bill aimed at shifting the state to a fault-based insurance system
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Efforts to dismantle Florida’s no-fault automobile insurance system may hit a roadblock as Gov. Ron DeSantis remains opposed to the proposed repeal. The governor previously vetoed a bill aimed at shifting the state to a fault-based insurance system and has shown no signs of reversing course.
Speaking after his State of the State address last Tuesday, DeSantis reiterated his stance, saying, “If they have a reform where we can show that it’s going to lower rates, it’s fine. But let’s just be clear. I mean, you know, we know that’s something that people from the legal and the trial bar have wanted to do. And so why would they want to do that? Obviously, they see that there’s opportunities for them to make money off of it.” He added, “I don’t want to do anything that’s going to raise the rates.”
Proposed legislative changes
Legislation proposed by Sen. Erin Grall (R-Vero Beach) and Rep. Alex Andrade (R-Escambia County) seeks to eliminate the requirement for personal injury protection (PIP) insurance and instead mandate bodily injury liability coverage of $25,000 per individual, $50,000 per incident, and $10,000 in property damage liability.
Personal injury protection (PIP) is a type of auto insurance that covers medical costs, lost wages, and related expenses for those injured in a car accident, regardless of who was at fault. Under Florida’s no-fault insurance law, drivers must carry a minimum of $10,000 in PIP and an additional $10,000 in property damage liability coverage.
The current system limits lawsuits against at-fault drivers, preventing claims for non-economic damages such as pain and suffering unless the injured party suffers a permanent injury, disfigurement, or death. The Florida Justice Association, which represents trial lawyers, has long supported repealing PIP, citing high insurance costs in the state.
Opponents of the repeal, including insurance industry lobbyists and Florida Justice Reform Institute President William Large, argue that lawmakers should allow more time to evaluate the impact of recent legislative changes before overhauling the system. Specifically, they want to assess how the elimination of one-way attorney fees, enacted in 2023, will influence insurance rates over the next few years.
Historically, Florida law allowed policyholders to recover attorney fees from insurers if they had to sue to obtain claim payments, a practice that critics argued incentivized excessive litigation. In 2023, the Legislature amended the law to require both parties to cover their own legal costs.
The debate over no-fault insurance is not new. In 2021, the Legislature passed a bill (SB 54) to replace PIP with a fault-based system, only for DeSantis to veto it. At the time, he acknowledged flaws in the PIP system but warned that repeal could create unintended consequences for both the market and consumers.
With legislative efforts once again underway, DeSantis’ opposition could prove a significant hurdle, leaving Florida’s no-fault system intact for the foreseeable future.
How did we get to where we are today?
Florida’s Personal Injury Protection (PIP) insurance system has a long and complex history, shaped by legislative reforms, legal battles, and ongoing debates about its effectiveness. PIP was introduced in 1971 as part of the state’s no-fault auto insurance system, aiming to provide medical coverage and lost wage benefits to accident victims regardless of fault. Over the years, the system has faced significant challenges due to fraud, rising costs, and attempts to repeal or replace it.
Origins and Implementation
In 1971, Florida became one of the first states to adopt a no-fault auto insurance system, requiring drivers to carry PIP coverage. The goal was to reduce litigation related to auto accidents by ensuring individuals involved in crashes could access up to $10,000 in medical expenses, lost wages, and death benefits. The system was designed to lower insurance costs by limiting lawsuits over minor accidents.
Over time, the PIP system faced numerous issues, primarily due to fraudulent claims and staged accidents, which led to increased premiums for drivers. Several legislative reforms were enacted to address these challenges.
2003 – Anti-fraud measures
In response to growing fraud and staged accident schemes, Florida introduced reforms that increased penalties for fraudulent PIP claims. The law also implemented stricter licensing requirements for healthcare providers to curb fraudulent medical billing.
2007 – Sunset and reinstatement
Florida’s PIP law briefly expired in 2007, but was reinstated within months due to concerns over increased lawsuits and lack of coverage for accident victims. The reinstated law introduced additional anti-fraud measures and required medical providers to be licensed to bill for PIP benefits.
2012 – House Bill 119 (PIP Reform Law)
One of the most significant overhauls occurred in 2012 under Governor Rick Scott. The reform introduced several key provisions:
- Accident victims had 14 days to seek medical treatment, or they would lose PIP benefits.
- Medical benefits were capped at $2,500 unless a physician, dentist, or emergency department diagnosed an emergency medical condition.
- Massage therapy and acupuncture were no longer covered under PIP.
- Required insurers to reduce PIP premiums by at least 10 percent by October 2012 and 25 percent by 2014, though costs did not significantly decrease for consumers.
Key legal battles
Several court cases have shaped the interpretation and enforcement of PIP insurance in Florida.
Kingsway Amigo Insurance Co. v. Ocean Health, Inc. (2011)
A Florida court ruled that insurers could not limit PIP payments to a Medicare fee schedule unless explicitly stated in the policy. This ruling led to insurers revising their PIP policies to clarify payment limitations.
2013 – Constitutional Challenge to PIP Reform
After the 2012 reforms, a group of chiropractors, massage therapists, and acupuncturists sued the state, arguing that the $2,500 limit and treatment restrictions were unconstitutional. A Leon County Circuit Judge initially blocked parts of the law, but an appeals court overturned the decision in 2014, allowing the reforms to stand.
The Florida Supreme Court ruled that insurance companies must clearly state in their policies how PIP benefits will be reimbursed. The case arose when Progressive attempted to pay medical providers based on the Medicare fee schedule, but the court found that the policy language did not specify this limitation.
Attempts to Repeal PIP
There have been several legislative efforts to replace PIP with a traditional liability-based system, but none have succeeded so far.
2018 – Failed PIP Repeal Attempt
Lawmakers pushed a bill to eliminate PIP and replace it with mandatory Bodily Injury (BI) coverage, but Governor Rick Scott opposed it, fearing higher premiums for some drivers.
2021 – Senate Bill 54 (PIP Repeal Bill)
The Florida Legislature passed a bill to replace PIP with a mandatory $25,000 bodily injury insurance requirement, but Governor Ron DeSantis vetoed it, citing concerns over potential cost increases for consumers.
2023-2024 – Continued Debate
Florida lawmakers continue to discuss replacing PIP with a fault-based system, but no major legislative changes have been enacted as of early 2024.
Current challenges and future outlook
Fraud remains a major issue, with Florida ranking among the top states for insurance fraud due to staged accidents, fraudulent medical billing, and excessive litigation. High insurance costs continue to burden Florida drivers, as the state has some of the highest auto insurance premiums in the nation. Lawmakers continue to explore potential replacements for PIP, but concerns remain about how changes would impact low-income drivers and uninsured motorist rates.
Conclusion
Florida’s PIP system has faced multiple reforms, legal challenges, and legislative repeal attempts over the past 50 years. Despite efforts to reduce fraud and control costs, PIP insurance remains a contentious issue. Future reforms may replace PIP with a traditional liability-based system, but until then, Florida drivers continue to navigate one of the most complex no-fault insurance systems in the US.
https://www.insurancebusinessmag.com/us/news/legal-insights/desantis-stands-firm-against-repealing-floridas-nofault-auto-insurance-law-527920.aspx
