After years of failed efforts, the Florida legislature has finally gotten rid of its “no-fault” auto insurance system. Assuming Governor Desantis signs the law, Florida drivers will soon have to carry liability coverage rather than no-fault coverage. Basically, drivers will have to carry a car insurance policy that will protect them if they cause an accident and someone else gets hurt. 

In a nutshell: gone are the days of PIP requirements and personal liability after a car accident.

What Changes Under Florida’s 2021 Car Insurance Law?

Under the current law, Florida drivers are not required to carry bodily injury liability insurance. Instead, motorists must have Personal Injury Protection – or PIP – coverage. PIP benefits cover the costs of medical bills, lost wages, and other expenses from the motorist’s own policy. 

Under the new law, Florida drivers will have to carry bodily injury liability insurance. Under the new law, Florida drivers will have to carry bodily injury liability insurance with limits of $25,000 for each person, and $50,000 total for all people injured, in any one traffic accident. 

Is Moving From a “No-Fault” System to a “Fault” System a Good Thing?

Florida’s old no-fault auto insurance system was well-intended. It did address some problems of the prior system when it was enacted in the 1970s. Unfortunately, it grew more cumbersome over the years, and increases in medical costs pushed auto insurance premiums higher and higher. Efforts to reform PIP and reduce costs did little to help consumers.

The legislature did the right thing in finally making a change this year. The new Florida law puts responsibility for accidents where it belongs. It should mean lower insurance bills for Florida drivers too. 

Benefits of Moving to a “No Fault” Car Insurance System

There are many benefits to switching to a liability system from a no-fault system. 

First, it will be fairer: people who cause accidents will have to pay for the damages they cause. 

Second, it will eliminate insurance premiums for PIP coverage, which have driven auto insurance costs higher for years. 

Third, it will bring Florida in line with most other states, which already have liability insurance systems that work reasonably well.

Can I Still Carry PIP Coverage in Florida?

If you want to. Florida drivers will still have the option to buy “medical payments” coverage if they want some of their medical expenses paid from their own policies. 

Medical payments coverage, which will be offered at $5,000 and $10,000 limits, could make sense for people who don’t have health insurance or have high health insurance deductibles. 

However, that coverage will no longer be mandatory. This will give people more control over decisions related to their health care coverage.

Does Florida’s New Auto Insurance Law Do Anything Other Than Repeal PIP Requirements?

The repeal of PIP is the most critical feature of the new law. Generally, it is the most ambitious reform of auto insurance since PIP was created many decades ago. 

However, the new law contains many other changes. 

Among other things, the new law also addresses:

  • Bad faith claims against insurance companies, and
  • Damages recoverable in auto accident claims.

These changes will likely matter most to people who make legal claims.

When Will Florida’s New Car Insurance Law Go Into Effect?

The new law is currently scheduled to become effective on January 1, 2022. Auto insurance customers will be allowed to transition their policies to comply with the new law even if their renewal date is before January. That will prevent the need for switching thousands of policies at midnight at the end of 2021.