SB 54 Repeals PIP, Requires BI Coverage, Creates New
Framework for Motor Vehicle Insurance Bad Faith Actions
State Senator Danny Burgess (R-Zephyrhills) today filed Senate Bill 54, Motor Vehicle Insurance. The legislation repeals Florida’s current Motor Vehicle No-Fault Law, which requires drivers to carry personal injury protection coverage, instead requiring that drivers carry bodily injury liability coverage. The bill also creates a new framework to govern motor vehicle insurance claims for bad faith failure to settle.
“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause the bodily injury or death of another person while operating a motor vehicle,” said Senate President Wilton Simpson (R-Trilby). “PIP coverage is outdated and doesn’t protect consumers. It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”
“Replacing our no-fault system with a bodily injury liability system more appropriately places liability where it should be – with the party that caused the accident,” said Senator Burgess. “Additionally, the bill creates a new framework for handling bad faith litigation that provides a clear set of standards to govern the conduct of both parties in the claims handling process, which we believe will lead to better outcomes for both insured Floridians and their insurance companies.”
Repeals No-Fault, Requires Bodily Injury Liability Coverage
SB 54 repeals the Florida Motor Vehicle No-Fault Law (No-Fault Law), which requires every owner and registrant of a motor vehicle in this state to maintain Personal Injury Protection (PIP) coverage. The bill enacts financial responsibility requirements for liability for motor vehicle ownership or operation, as follows:
- For bodily injury (BI) or death of one person in any one crash, $25,000, and
- Subject to that limit for one person, $50,000 for BI or death of two or more people in any one crash.
- Retains the existing $10,000 financial responsibility requirement for property damage.
- Revises required coverage amounts for garage liability and commercial motor vehicle insurance, and increases the cash deposit amount required for a certificate of self-insurance establishing financial responsibility for owners and operators of motor vehicles that are not for-hire vehicles.
- Repealing the No-Fault Law eliminates the limitations on recovering pain and suffering damages from PIP insureds, which currently require bodily injury that causes death or significant and permanent injury.
Requires Medical Payments Coverage
SB 54 requires insurers to offer medical payments coverage (MedPay) with limits of $5,000 or $10,000 to cover medical expenses of the insured. Insurers may also offer other policy limits that exceed $5,000, and may offer deductibles of up to $500. The bill requires that insurers must reserve $5,000 of MedPay benefits for 30 days to pay physicians or dentists who provide emergency services and care or who provide hospital inpatient care.
Creates a New Framework for Motor Vehicle Insurance Bad Faith Actions
SB 54 creates a new framework to govern all bad faith claims for failure to settle related to motor vehicle insurance. The bill requires insurers to follow claims handling best practices standards based on long-established good faith duties related to claim handling, claim investigation, defense of the insured, and settlement negotiations.
The bill establishes that it is a condition precedent to bringing a third-party bad faith action not brought under s. 624.155, F.S., that the claimant serve a demand for settlement. The demand must:
- Identify the date and location of the loss, the claimant, and insured.
- State the legal and factual basis of the claim.
- Detail the claimant’s injuries, medical treatment, and the amount of current and reasonably anticipated future damages.
- Demand a settlement amount, which may not exceed the insured’s policy limit.
- Release, if accepted, the insured from any further liability.
- Not provide conditions on the settlement other than payment of the demand and the ability of the claimant to take an examination under oath of the insured.
The bill allows the third-party bad faith claimant to condition the demand for settlement on taking a two hour examination under oath (EUO) of the insured limited to discovering recoverable assets. The bad faith claimant may withdraw the demand for settlement after the EUO. If the insured refuses to submit to the EUO, the insurer may tender policy limits without obtaining a release of the insured and may not be held liable if there is an excess judgment against the insured.
The bill provides that in a third-party action for bad faith failure to settle not brought under s. 624.155, F.S., the insurer is not liable for bad faith if the insurer tenders policy limits within 30 days of receiving a demand for settlement.
Allows for Named Driver Exclusions
SB 54 authorizes the exclusion of a specifically named individual from specified insurance coverages under a private passenger motor vehicle policy, with the written consent of the policyholder.