Guest opinion: No-fault repeal creates more problems than it solves

Originally published by Naples Daily News | View Story


By David A. Sampson


Florida drivers are unknowingly on a collision course this week with the potential for dramatically higher insurance costs in the near future, due to legislation moving in Tallahassee. Auto insurance costs could skyrocket up to an additional $805 annually and likely lead to an increase in the number of uninsured motorists on Florida’s roads.

By week's end, the Florida Legislature will be voting on the final passage of legislation — House Bill 719 and Senate Bill 54 — that will repeal Florida's no-fault auto insurance law and replace it with a package of mandatory liability and medical payments coverage. Unfortunately, the legislation lacks the legal reform and cost control measures needed to help Florida drivers — and will instead dramatically increase auto insurance costs for most Floridians.


Almost every year, the repeal of no-fault auto insurance coverage is brought up and debated. However, because of its complexities, such a dramatic change warrants thoughtful and thorough consideration by lawmakers before the system is hastily changed. As noted by several legislators, there has not been an independent study or analysis of the financial impact that this quickly passed legislation — in any of its forms — would have on Florida drivers. It is also concerning that HB 719 bypassed the House Insurance and Banking Subcommittee, which is a critical committee that should review and weigh in on such a major auto insurance overhaul.

This year's proposals of the no-fault repeal are intended to move Florida from a no-fault automobile insurance system to an automobile liability system. In place of no-fault, the legislation would require Floridians to have bodily injury coverage. This means that drivers who are at fault in an accident would now be entirely liable for any damages that occur.


The American Property Casualty Insurance Association (“APCIA”) obtained independent actuarial assistance to assess the impact of the language of these bills, and our findings show that there will be severe ramifications for consumers, if passed. APCIA estimates that the requirement of a mandatory liability and medical payments coverage package would increase the cost of the average auto insurance policy by as much as 23 percent or $344. The proposals also have the potential to raise costs dramatically – by as much as $805 a year - for low-income drivers who purchase minimum levels of coverage.

Florida drivers already pay the highest premiums in the country for full auto insurance coverage. 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 for Florida drivers, especially those who can least afford it, such as retirees or underserved communities.


The increase in costs could lead to more uninsured motorists on Florida’s roads, which is especially concerning as Florida already has one of the highest rates of uninsured motorists in the nation at 20 percent.


The goal of any repeal or reform of Florida’s no-fault auto insurance system should be to reduce costs for consumers. Productive and meaningful changes to the no-fault system should include reforming Florida's bad faith laws by effectively minimizing lawsuit abuse, decreasing opportunities for fraud, and safeguarding policyholders' rights.

However, the legislation as it presently stands does not address any of these issues that are in need of reform. In fact, the bad faith language in the bills would provide more opportunities for lawsuit abuse by implementing many new ambiguous standards, processes, and definitions, making this legislation a substantial step backward.

Ultimately, HB 719 and SB 54 are not the answer to many of the issues that the repeal intended to address. In fact, they create more problems, all of which would negatively impact drivers in Florida. We encourage lawmakers to put Floridians, who are all dealing with the pandemic recovery, first and oppose HB 719 and SB 54.


David A. Sampson is president and CEO of the American Property Casualty Insurance Association.

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