A Visitor's Guide to Florida No Fault Insurance Law

Out of state visitors to Florida who decide to rent a car during their vacation or business trip will encounter a unique car insurance system in the event of an accident. That is because Florida is one of a dozen U.S. states that have adopted "no fault insurance," where, following an accident, rather than determining which vehicle involved was at fault, an individual's own insurance company will pay for the loss. This is a type of coverage that limits how much an insurance company must pay following an accident and includes both medical bills and property damage.

Moreover, the Florida Financial Responsibility Law requires that all motorists purchase personal injury protection (PIP), though individuals who do not live in Florida for more than 90 days out of the year are exempted from this requirement. Currently, PIP includes coverage for bodily injury liability of $10,000 per person, $20,000 per crash, and $10,000 property damage per crash. PIP covers the policyholder, passengers who do not own a vehicle, and those whom the policyholder allows to drive his or her car. Pedestrians and bicyclists who are Florida residents are also covered.

Proponents of no fault insurance claim that less litigation results from this regime as mandatory PIP insurance means that no one is at fault for the accident and insurance companies automatically disburse the mandatory amounts to an injured party. Further, they argue that because small claim lawsuits will be reduced, insurance premiums will drop accordingly.

Legislative Reforms of No Fault Insurance in Florida

While Florida motorists have been under a no fault system since 1972, recent allegations that the state's auto insurance system was "riddled with outright fraud and blatant abuse" led to several reform initiatives in 2012. In a five-year span from 2005 to 2010, while the number of drivers in Florida stayed static with declining accident rates, insurance costs increased dramatically, leading some to label it a "fraud tax." To combat this problem, insurers were required to reduce PIP rates, beginning with 10 percent in 2012 and increasing to 25 percent in 2014.

Moreover, injured drivers and passengers must seek initial medical treatment from a hospital, medical doctor or chiropractor within 14 days of an accident and the type of treatment sought must reflect the injuries actually suffered. If an injured person does not require emergency medical attention, then the limit for medical care is set at $2,500 rather than the full $10,000 in PIP benefits. Doctors who commit fraud under the no fault system are also penalized under the law and insurers are granted an extension of 60 days to fully and thoroughly investigate an accident in order to reduce the incidence of fraudulent claims.

Guide to Buying Auto Insurance

Because obtaining auto insurance is an important part of driving in Florida, and "residency" as defined in the state's no fault insurance law means that even visitors may need to purchase PIP if they are in Florida for more than 90 days, even if that stay is not consecutive, consumers should keep several points in mind:

• Request quotes from several licensed insurance agents.
• Ensure that the information listed in your application is correct. Inaccurate information could lead to an insurance company refusing to pay a claim.
• Immediately report any changes such as a name change or a change of address to your insurance company.