Proposals (House Bill 719 and Senate Bill 54) to eliminate Florida’s existing no-fault auto insurance system and replace it with a mandatory bodily injury coverage system are projected to have a significant financial impact on low-income drivers who purchase low coverage limits, according to the American Property Casualty Insurance Association (APCIA).
In Florida, approximately 40 percent of drivers carry minimum limits that are below what would be required under HB 719 and SB 54. Under the current proposals, these drivers could see their auto insurance costs rise by $165 to as much as $876 a year, according to data assembled by APCIA.
Additionally, the House proposal is likely to increase costs by an average of 5 percent for all drivers in Florida, according to a preliminary analysis conducted by Milliman, due to its failure to address much needed legal reforms to Florida’s bad faith laws.
“Low-income drivers who purchase minimum limits in Florida are likely to be hit the hardest financially if Florida’s no-fault auto insurance system is eliminated and replaced with a mandatory bodily injury coverage system,” said Logan McFaddin, assistant vice president of state government relations for the APCIA. “This could result in even more uninsured motorists on Florida’s roads, which is a serious concern as Florida has one of the highest rate of uninsured motorists in the nation at approximately 20 percent.”
“Florida drivers already pay the highest premiums in the country for full auto insurance coverage,” continued McFaddin. “With the pandemic putting financial strains on consumers and businesses, now is not the time for lawmakers to implement major policy changes that will likely increase costs drastically for those who can least afford it.”
Additionally, our state’s legal system is rife with rampant lawsuit abuse, excessive attorney fees, and skyrocketing settlements, which has resulted in one of the worst legal environments in the country. Repealing Florida’s no-fault auto insurance system, without real legal reforms and tools to fight fraud, will fail to deliver meaningful savings for Florida drivers and exacerbate our state’s lawsuit problems.
“Our state’s court system is experiencing a backlog of more than one million cases due to the pandemic. This is not the time to send more auto insurance claims to court by repealing the no-fault auto insurance system,” added McFaddin.
The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions—protecting families, communities, and businesses in the U.S. and across the globe.