Florida is one of the few states in the USA that uses a “no-fault” insurance protocol to handle vehicular accidents. In theory, no-fault insurance is a financial and legal mechanism that is, in theory, designed to make things easier for everyone. In states that use “traditional” insurance methods, if there’s a motor vehicle accident, one of the earliest factors that need to be determined is who is at fault for the accident. Once the fault has been determined, the insurance provider for the driver at fault will be expected to cover any required insurance or medical costs. This could sometimes be a lengthy process and even delay receiving funds that might have been quickly needed for repairs or even medical treatment.
The no-fault idea was supposed to provide a faster, easier method for resolving cost issues in car accidents. A state that uses no-fault insurance means that, theoretically, in the event of an accident, regardless of who is at fault, insurance companies for all involved will immediately provide a payout to cover costs. This seems convenient, as it minimizes waiting. From a legal perspective, it seemed like a good idea, too, as part of this idea was to reduce the number of lawsuits trying to recoup costs for minor repairs or medical treatment in court.
The reality, however, didn’t quite go the way many insurers or drivers in Florida intended.
Crime Finds Ways
One of the biggest issues with Florida’s no-fault insurance provisions is that it leads to many “bad faith” insurance claims. In other words, some people commit insurance fraud. Individual drivers sometimes perpetrate this, and in the worst-case scenarios, it is an organized effort between drivers, doctors, lawyers, and even auto repair businesses, such as auto glass contractors.
Drivers, for example, will receive a false diagnosis from a doctor, usually something similar to a disc injury. This type of muscular injury can be debilitating but is easy to fake. Perhaps most importantly, it is a muscular injury that does not appear on x-rays, making it an easy diagnosis.
However, windshield replacement is Florida’s most prevalent form of insurance fraud. Sometimes, the drivers don’t even know they’re part of an insurance fraud scheme. A damaged windshield might only require $200-$300 to repair, but with false claims, unethical auto repair businesses can inflate the damage to thousands of dollars without informing drivers of what’s happening.
The PIP Problem
Personal Injury Protection or PIP is at the heart of Florida’s no-fault insurance policy. There are a total of 12 remaining states in the USA that still use a no-fault policy, but for three of them, Kentucky, Pennsylvania, and New Jersey, it’s optional. Florida is one of the remaining nine where no fault is mandatory, and this is where PIP becomes a foundation.
All drivers must, by law, be insured for $10000 in PIP. This effectively means that any accident in Florida will get quickly resolved for up to $10000 because of the no-fault policy. However, for accidents that exceed this in damage and/or medical costs, that’s when it’s time to go to court to secure the rest of the financial damages if the drivers at fault or their insurance company don’t admit to fault.
Because of this $10000 limit and the frequency with which fraud occurs to take advantage of that “easy” $10000, Florida is consistently in the top 10 most expensive states for insurance and spends a lot of time hovering within the top five range on any given year.
A Need For Reform
In the past, there have been efforts to either nullify or reform the way Florida’s no-fault insurance works. In 2007, no-fault insurance was completely repealed and reinstated quickly after. The state recently tried to revise some mechanisms behind no-fault insurance, but Governor DeSantis vetoed that bill in 2021, leaving Florida in its current, messy insurance state. New efforts have started this year to try again, with a proposal to eliminate the current $10000 in PIP with $25000 in bodily injury insurance. Whether this new attempt at repeal will succeed remains to be seen.
One of the biggest issues with Florida’s current no-fault policy is that it is trapped in the past. The PIP cost initially struck was conceived in 1979, and that amount hasn’t changed in the decades since its inception. However, $10000 adjusted to current dollars is actually closer to $77000. The cost of medical treatment has inflated tremendously in the decades since PIP was conceived, but the $10000 cost is often insufficient to handle the medical expenses a driver in 2022 may face.
Florida’s insurance environment is packed with bad faith claims despite the convenience that PIP was supposed to bring. In the cases where people legitimately need the insurance, they may have to go to court anyway to fight for compensation for medical costs that quickly exceed $10000.
If you’re in a situation where you’ve been in an accident, and you’re not a fault, talk to a car accident attorney and get the help you need.