Florida governor vetoes no-fault insurance repeal bill
A recent study found the bill would have increased rates, with some seeking minimum coverage seeing the most dramatic spikes.
Florida Gov. Ron DeSantis has vetoed a bill that would have repealed the state’s no-fault auto insurance rules. If signed, the law would have required bodily injury liability coverage with limits of $25,000 per claimant and $50,000 per occurrence.
“While the PIP system has flaws and Florida law regarding bad faith is deficient, CS/CS/SB 54 does not adequately address the current issues facing Florida drivers and may have unintended consequences that would negatively impact both the market and consumers,” DeSantis wrote in his letter of objection to Florida’s secretary of state.
Florida drivers already pay one of the highest premiums nationwide, and concerns about the law’s potential rate hike prompted more than 37,000 letters to pour into DeSantis’ office asking for a veto, according to Logan McFaddin, assistant vice president of state government relations for the American Property Casualty Insurance Association (APCIA.)
A report from Pinnacle Actuarial Resources found that if the no-fault law had been repealed, overall auto insurance rates in Florida, on a combined basis, would have increased around 13%. For drivers seeking minimum coverage, the rate hike was estimated at nearly 50%.
“In Florida, approximately 40% of drivers carry minimum limits,” McFaddin said in a release. “Skyrocketing costs could have also resulted in coverage becoming unaffordable for many, leading to more uninsured drivers on Florida’s roads.”
Concerning the potential impact on the volume of uninsured drivers, Pinnacle’s study projected a 25% increase in uninsured motorists had the law gone into effect. The report noted Florida had the sixth-highest rate of uninsured drivers, based on 2019 data, with around 20% of drivers in the state forgoing auto coverage.
“Moving forward, we hope any proposals to reform or eliminate Florida’s no-fault auto insurance system will reduce consumer costs, combat rampant lawsuit abuse by implementing meaningful bad faith reforms, and prevent or minimize fraud,” APCIA’s MCFaddin said.
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