After two years of soaring property insurance rates, Floridians may get a break on their auto insurance. Some auto insurers say they will lower premiums for most drivers if the state’s no-fault accident system expires as scheduled in October. The move could save Florida drivers hundreds of dollars a year in auto insurance premiums.
State Farm, Florida’s largest auto insurer with 2.7 million policies, already has filed to reduce rates an average of 16 percent. The company estimates an annual savings of $360 for a typical two-car household, a statewide total of $435 million a year.
Florida’s largest car insurers claim that No-fault has been plagued with legal loopholes and fraud and has become too expensive and gotten out of control. The no-fault system requires drivers to carry $10,000 in personal injury protection (PIP). It covers medical bills for drivers and their passengers’ injuries regardless of who’s at fault in an accident.
In 1972, Florida became the second state to adopt no-fault, which was designed to limit lawsuits by eliminating minor injuries from the tort system. In return for medical benefits, the No-fault law restricts people’s right to sue if they are hit and injured in an accident. Today, only 12 states retain the no-fault medical provisions.
Some auto insurers want to retain the No-fault law. GEICO, Florida’s third-largest auto insurer, supports improvements to the current no-fault system. Likewise, the Florida Justice Association and the Florida Chiropractic Association support re-enactment of PIP. In addition, the Florida Hospital Association says PIP should remain or be replaced with another mandatory medical coverage. Florida trial lawyers favor mandatory bodily injury coverage, now required in 47 states, to make at-fault drivers pay for injuries.
Florida drivers pay the sixth-highest auto insurance rates in the country, according to the Insurance Information Institute. New Jersey is No 1. The annual Florida premium averaged $1,062 compared with $838 nationwide in 2004, the most recent year measured.