Attention Drivers: Florida Set to Repeal the Motor Vehicle “No-Fault” Law

Florida Gov. Ron DeSantis is to sign legislation that repeals Florida’s Motor Vehicle No-Fault Law that has been the law in Florida since 1979. The No-Fault Law required drivers to have a minimum of $10,000 personal injury protection or a no-fault insurance policy. However, far too many drivers failed to have even that coverage in place for themselves.

In a dramatic shake-up, Senate Bill 54 instead requires drivers in the State of Florida to have mandatory bodily injury coverage starting at $25,000 – which means that the at-fault driver would be responsible for the medical expenses of his or her victim.

What are the Critics Saying?

Skeptics of Senate Bill 54 urge the Governor to veto the Bill, which was passed by the Florida Senate on April 30, 2021. They argue that the Bill will send auto insurance premiums into orbit – a major red flag for Florida drivers, who already pay some of the highest premiums in the country for full auto coverage. One study, conducted by the American Property Casualty Insurance Association, hypothesized that the new Bill could increase the average auto insurance policy by as much as 23%. The Florida Chamber of Commerce has notably been silent. It has refrained from endorsing Bill in its recent Legislative Update, noting that the Chamber continues to monitor and evaluate the consequences of the Bill.

Others speculate that the Bill, as a result of increasing the price for coverage, will lead to more and more Florida drivers hitting the roads without any insurance. This potential side effect of Senate Bill 54 concerns many critics because Florida consistently ranks in the Top 10 for states with the most uninsured drivers.

A Positive Take:

Florida legislators supporting Senate Bill 54 cite a study done by Florida’s Office of Insurance Regulation and argue that insurance rates will drastically fall if the state repeals the personal injury protection system. Other supporters cite to certain provisions in the Bill that address bad faith – praising the Bill for addressing the widespread fraud observed under the no-fault regime. A downfall of the current law is that drivers are required to get $10,000 in coverage for their own bodily injuries, but they can still drive without any insurance to cover the people they hurt in accidents.

What’s Next?

While it remains difficult to accurately predict the impact Senate Bill 54 will have on insurance rates and the number of uninsured drivers on the road, one thing is certain – Senate Bill 54’s passage into law will drastically alter the auto-insurance landscape in Florida. All drivers should keep a close eye on the Governor’s signature — the new law will not take effect until January 1, 2022.