Florida Lawmakers Eye Repeal of No-Fault Auto Insurance, Facing DeSantis Opposition
Florida lawmakers are currently debating bills that would repeal the state’s no-fault auto insurance laws and increase minimum liability coverage requirements, despite Governor Ron DeSantis’s continued opposition. This legislative push marks a recurring effort to reshape the state’s auto insurance landscape.
The proposed legislation seeks to eliminate the requirement for personal injury protection (PIP) coverage and introduce new minimum amounts for both bodily injury and property damage liability.
Florida’s existing no-fault system, which mandates that drivers carry PIP coverage, has been a subject of debate for years. The central issue revolves around the proposal to replace it with mandatory bodily injury liability coverage. Past attempts at reform have been unsuccessful, with DeSantis vetoing similar legislation in 2021.
Under the current no-fault system, drivers are required to carry $10,000 in PIP coverage to cover their medical expenses, regardless of who is at fault in an accident. However, critics argue that this $10,000 limit, set in 1979, is inadequate to cover modern medical costs.
In 2021, the Florida Legislature passed Senate Bill 54 (SB 54), which aimed to abolish the no-fault system. The bill also mandated that drivers carry bodily injury (MBI) coverage of at least $25,000 per person and $50,000 per accident. Despite legislative approval, DeSantis vetoed the bill, citing concerns that it may increase insurance costs and potentially lead to a rise in the number of uninsured drivers.
During his State of the State address, DeSantis reiterated his opposition to the proposed repeal.
What Changes Would the Repeal Bring?
If the new legislation passes, the no-fault law would be repealed, effective July 1, 2026. At that point, drivers would be legally required to carry bodily injury and property damage liability coverage. The bill sets a minimum of $25,000 for bodily injury or death of one person and $50,000 for incidents involving multiple people. Currently, limits include $10,000 for personal injury and property damage. The $10,000 property damage minimum would remain unchanged.
DeSantis has previously expressed concerns that repealing the no-fault laws could have negative consequences for Florida drivers. The insurance industry is warning that eliminating PIP and simultaneously increasing minimum coverage requirements could lead to higher auto insurance rates.
Potential Rate Hikes and Industry Concerns
Michael Carlson, president of the Personal Insurance Federation of Florida, stated that increasing the bodily injury coverage requirement to $25,000 would likely result in higher premiums. He noted that higher costs could lead to more drivers opting out of coverage. This, in turn, could increase uninsured motorist claims and further impact rates. Carlson also suggested that mandating bodily injury coverage could increase the number of lawsuits, which could raise litigation expenses for insurers.
Carlson pointed to House Bill 837, a law passed in 2023, as an example of reforms that are already contributing to lower auto insurance rates in the state. He believes the industry should fully assess the impact of the 2023 reforms before considering further legislative changes.
Industry groups have described HB 837 as one of the most significant reforms Florida has enacted in decades. Carlson noted that it is still too early to determine the law’s full impact, including those related to medical damages. He suggested that once more cases reach juries under the new law, claim severity may decrease, potentially leading to further rate reductions.
While some members of the Florida House support repealing no-fault laws, Carlson says that there is uncertainty within the legislature regarding the issue. He does not expect the current repeal effort to succeed.
“The governor’s public position against repeal will have an impact on legislative activity on this issue,” Carlson stated in a report from AM Best. “He has been clear that he does not want to see adverse unintended consequences, such as rate increases, caused by the change in law.”
