Bill 54 was passed in the Florida Senate on April 14, 2021. [1]
However, it was vetoed by Governor DeSantis before being signed into law on May 6. 2021.[2]
“While the PIP system has flaws and Florida law regarding bad faith is deficient … SB 54 does not adequately address the current issues facing Florida drivers and may have unintended consequences that would negatively impact both the market and consumers,” DeSantis wrote in his veto letter.[3]
After passing in the Senate, representatives from insurance companies across Florida made it clear that rates will increase if mandatory B.I. passes in Florida. And this sentiment is not new. Time and time again, insurance companies have testified in front of Senate and House committees and made it clear that rates would increase if PIP was repealed.
The recent push for BI (Bodily Injury ) insurance would have changed everything. Currently, under the PIP laws of Florida, drivers who are injured in an accident can receive up to $10,000 quickly and easily, which covers medical costs, lost wages, and property damage, instead of going through the court system to assign fault in the accident.[4]
Only Florida and New Hampshire do not require bodily injury insurance. Anytime you are involved in a car accident, your insurance pays the first $10,000 for medical treatment, no matter who causes the accident. That’s the Florida no-fault law.
If you are covered by PIP, you must reach the permanency threshold before you can receive damages and increase your compensation after a car accident, maxing out your PIP coverage and meeting a standard threshold.
If PIP was repealed, that threshold would not need to be met. What does that mean? The Senate planned to replace the no-fault statute in Florida with mandatory bodily injury coverage in the amount of $25,000 for an individual and $50,000 for two or more people. Essentially, Florida would become a mandatory B.I. state. like our neighbors Georgia and Tennessee.
The bill passed in The House and the terms were agreed upon. It was then given to Governor DeSantis for final approval, where of course the Governor vetoed the bill. It was unlikely that a sitting governor would want Florida residents to have to shoulder raised insurance rates during this difficult economic period.
PIP insurance provides coverage for injury to you and to others, while BI insurance only provides legal protection against lawsuits if you are responsible for the accident. BI coverage also protects against lawsuits made against you if you were responsible, allowing you to hire a lawyer to represent you in the event that you are at fault for the accident.
Many opponents of PIP and no-fault laws point to fraud as a major cause of increased rates. Because your insurance company is on the hook for the first $10,000, regardless of fault, many believe that Florida drivers are more likely to make a claim to collect that money from their insurance company.
Opponents of BI say that the repeal would actually increase rates for Florida drivers and this extra burden would come at a time of economic strife.
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