Fort Myers car accident lawyers are carefully watching Florida legislature developments pertaining to proposed changes to auto insurance claims laws that could impact how we approach crash cases.
The one that would result in the most change is SB 54, which would repeal provisions of Florida’s No-Fault Law to a fault system.
Fort Myers Car Accident Lawyers Explain Florida PIP
Florida is one of just a few states in the country with a no-fault law for car accidents. This does not mean nobody is ever to blame when an auto accident happens. Rather, it has to do with the way crashes are handled for insurance purposes. The type of insurance associated with a no-fault system is called personal injury protection, or PIP.
The intention of the existing system is to provide injured drivers with a maximum of $10,000 in immediate coverage for medical coverage and wage losses following a crash – without having to prove anyone was at-fault. The idea was to reduce delays in payments for those injured and to reduce the chances courts would be overburdened by resolving minor car accident claims.
Florida law requires owners of all motor vehicles registered in the state to purchase PIP, making drivers responsible for their own injuries regardless of fault. (It is only if your injuries meet the serious injury threshold that you can step outside the no-fault system to pursue pain and suffering damages against the at-fault driver.)
In theory, PIP should allow most people injured in crashes to recover their damages without great difficulty. But insurers – even those to whom you are faithfully paying monthly premiums – are not inclined to pay claims if they can find a way out of it. Although some PIP claims can be secured fairly easily without the aid of a lawyer, it is fairly common for clients to come to us because they are having a tough time getting insurance companies to do the right thing.
Previous Florida PIP Changes
For more than a decade, Florida lawmakers have sought to end PIP over alleged abuse and fraud. Several changes have been made to the law but the system still exists.
Prior to 2012, the Florida Office of Insurance Regulation reported the number of Florida car accidents and people injured in them remained relatively static, but the number of PIP claims soared. The National Insurance Crime Bureau cited Florida as having numerous cities on their list for the highest amount of questionable claims in the country. PIP accounted for about 2 percent of the insurance premiums collected in Florida while being the subject of 50 percent of fraud referrals.
In 2012, state lawmakers sought to address these issues by revising PIP, requiring (among other things):
- Those seeking PIP medical benefits must receive initial services and care within 14 days of the crash. Included with those expenses, there is reimbursement only if the care was provided by a licensed physician or dentist at a facility that is a hospital, hospital-owned, or licensed emergency transportation. Follow-up services must be consistent with the underlying medical diagnosis when the person received initial care and services.
- A cap of $2,500 for someone who is not diagnosed with an emergency medical condition (as opposed to a $10,000 limit for someone who does have an emergency medical condition).
- Up to $5,000 in death benefits on top of the medical and disability benefits. Prior to the law change, death benefits were the lesser of new PIP benefits with a $5,000 cap.
- The insured is to take an oath, to tell the truth to insurers conducting a Florida car accident investigation. Non-compliance will result in claimants receiving zero benefits.
That law also contained several provisions related explicitly to PIP fraud, including a penalty section that says anyone who commits PIP fraud loses his or her license for 5 years and cannot receive PIP for 10 years.
Why Lawmakers Want to End PIP Now
What lawmakers are proposing with SB 54 is to trade PIP in favor of requiring drivers to carry bodily injury liability coverage that would pay out $25,000 for crash-related injury/death and up to $50,000 for the crash-related injury/death of two or more people. Drivers would still be required to maintain $10,000 in property damage coverage.
Lawmakers allege fraud continues to exist within the system, driving up Florida’s insurance rates to among the highest in the country. However, our Fort Myers car accident lawyers would point out that PIP fraud may not the only thing to blame for that. Many against repealing PIP coverage point to the state of Colorado. As Colorado repealed its no-fault law in 2013, spurring a temporary reduction of insurance rates, followed by a rapid reversal of that trend; there are alternative possible causes for this including the legalization of recreational cannabis; the rapid growth of the state and inclimate weather.
Beyond this, there is concern that doing away with PIP is only going to make it harder for those seriously injured in crashes to collect monies for medical bills. Without a system of no-fault coverage, the responsibility to pay will always rest with the at-fault driver. In theory, that would be fine, but the problem is not everyone carries the auto insurance they should (Florida has the highest uninsured motorist rate in the country – 28 percent) and a significant portion carry only the bare minimum. A payout of $25,000 is not going to cover much if you are seriously injured – and that is after fighting with the other driver’s insurer proving their fault to get it.
Ultimately, if PIP is repealed it may or may not lead to higher monthly insurance payments because more insureds will (and should) be purchasing uninsured/underinsured motorist coverage. Under a fault system for crashes, UM/UIM coverage will become even more of an imperative than it is now.
SB 56 Also Aims to Curb Bad Faith Claims
One very concerning provision of SB 56 is one that aims to curb “bad faith” claims, such as when insurers deny claims without reason, cause unnecessary settlement delays, or lowball insureds with settlement offers for far less than what they deserve.
This has become a point of serious contention among lawmakers, and our Fort Myers car accident lawyers were heartened to see one lawmaker has already filed for an amendment that would strip bad faith reform language from the bill.
If you are injured in Fort Myers, Naples or Key West, contact our injury attorneys at Garvin Injury Law at 800.977.7017 for a free initial consultation.