Florida state officials are investing over $125,000 in a study to investigate the feasibility of abandoning the state’s no-fault insurance system for car accidents after more than 40 years. Legislation that was slated to reduce no-fault bills and fraud by up to $1 billion was submitted back in 2012, according to The Palm Beach Post. However, records show that since 2015, Florida’s top insurers have increased insurance premiums by nearly 40 percent.
According to Department of Financial Services records, a third-party firm will soon be chosen to conduct the study by June 2016. The proposed draft of the study will be due by August 26th and the final copy on September 2nd. One of the study’s several goals is to determine “the potential impact to Floridians if the personal injury protection coverage requirements were repealed and replaced with varying levels of bodily injury coverage, or if the current requirements to purchase auto insurance were completely repealed.”
Drivers in Florida are required to purchase $10K of coverage in coverage for no-fault insurance. The system was designed in the 1970’s to accommodate all sorts of minor injuries, irrespective of who might be at fault for the accident and help avoid lawsuits in such situations. Unfortunately, no-fault insurance (otherwise known as Personal Injury Protection insurance) causes it’s own problems, especially large lawsuits. Many drivers believe it forces them to unnecessarily purchase coverage they would already via employer health care and other plans.
Only a few states – of which Florida is one – have these so named “no-fault systems”. Because of the bill in Florida alone, drivers boast the fourth-highest insurance premium average in the country. In 2003, Colorado eliminated a similar system and subsequently reduced the collective insurance bills of the general public by 35 percent. Prior to getting rid of their no-fault system, Colorado was shelling out more no-fault insurance payments than Florida in an average year. Their own study concluded that scrapping the program resulted in an savings of more than $320 per automobile after only 5 years.