Business groups are urging Gov. Ron DeSantis to veto a bill that would repeal the state’s no-fault personal injury protection (PIP) system , saying the proposal would raise auto rates and increase the number of uninsured drivers on the roads.
The legislature passed Senate Bill 54 at the close of the 2021 session by wide margins. The final version makes medical payments coverage optional, but it would mandate at least $25,000 in coverage for bodily injury or death of one person and $50,000 for the injury or death of two or more people.
SB 54 would also create a new framework for settling third-party claims which allege that an insurer acted in bad faith. The bill, however, states that it doesn’t aim to affect any cause of action now available to challenge insurance company practices.
The American Property Casualty Insurance Association (APCIA) reported that Florida residents had sent 12,000 letters to the governor urging him to oppose the bill in order to stop rising auto insurance premiums.
“APCIA obtained actuarial assistance to assess the impact of SB 54, and our analysis shows it could increase the cost of the average auto insurance policy by as much as 23 percent or $344,” Logan McFaddin, the APCIA’s assistant vice president of state government relations, said in an email to the Florida Record. “Drivers who carry the lowest levels of coverage could see increases as high as $860 a year.”
The anticipated jump in insurance rates would likely lead to more uninsured motorists on the roads, adding to Florida’s traffic safety concerns, according to McFaddin.
The bill also lacks a meaningful update of laws governing bad-faith claims against insurers, she said. These statutes are a major factor in lawsuit abuse in Florida, according to McFaddin.
“Without much-needed legal reforms, SB 54 will only serve to fuel the current cycle of lawsuit abuse, clog our court system with more lawsuits and worsen Florida’s legal environment,” she said.
The Florida Chamber of Commerce’s Consumer Protection Coalition also urged DeSantis to veto the measure, arguing that any PIP repeal needed to address basic needs: cost savings, an improved civil litigation environment and limited government mandates. None of these goals is achieved through SB 54, the coalition said in a statement.
“It is also notable that this bill passed without the support of a single auto insurer out of concerns of what it will do to rates for their consumers,” the coalition’s statement said.