Regardless of which state you call home, having auto insurance is an absolute must. However, these requirements can vary by state. This includes the type and amount of coverage you’re legally required to carry.
Some states, like Florida, follow a no-fault insurance system and this can make filing an accident claim a little complicated. Understanding Florida’s no-fault insurance laws is essential if you’re involved in a vehicle accident and want to receive financial compensation for your damages.
What is a No-Fault Insurance State?
Florida is one of only about 12 states following no-fault insurance rules. Texas, Utah, and New York are a few other states with similar insurance requirements.
No-fault insurance works a little differently than standard auto coverage. The insurance pays out regardless of who’s at fault for the accident. No-fault insurance is also known as Personal Protection Insurance (PIP).
While turning to your insurance carrier to cover damages after an accident seems pretty simple, Florida’s no-fault insurance law has two parts. Your PIP policy covers part of your expenses when you and/or your passengers suffer injuries in a vehicle wreck.
The other part of the state’s insurance law applies to filing a claim against the at-fault driver. You have the legal right to sue for damages but there’s usually a cap on the amount of compensation you can receive.
Why Florida is a No-Fault State?
Even though no-fault insurance laws can be confusing to navigate, states like Florida enacted the rule with good intentions. Lawmakers believed that no-fault insurance laws would help make the claim process more efficient for accident victims. They also hoped the laws would help lower auto insurance premiums.
Unfortunately, the opposite is proving to be true. Insurance premiums are typically higher in no-fault states and the claim process isn’t any easier to navigate.
A few other downsides to the state’s no-fault insurance laws include:
- There are limited consequences for bad driving behavior since PIP pays out regardless of who’s responsible for the accident.
- Insurance fraud typically increases in no-fault states. Some medical clinics help individuals file fraudulent claims. The clinics and individuals share the PIP payouts. This may also be a reason for the higher monthly insurance premiums.
- Litigation in the state’s civil courts increases instead of decreasing since PIP doesn’t cover property damage. To recover losses due to vehicle repair and/or replacement costs, the accident victim must file a lawsuit against the at-fault driver in court. This means, most Florida vehicle accident claims eventually end up being litigated in civil court.
- Another unexpected downside to no-fault insurance is both drivers file claims with their separate insurance carriers. This means the amount of insurance necessary to cover vehicle accidents with injuries or fatalities is essentially doubled. Instead of only one insurance policy kicking in, usually the at-fault driver’s coverage, everyone is turning to their carriers.
You may be wondering if Florida is considering dropping or revising its no-fault insurance laws, especially since the state hasn’t made any noticeable changes since the 1970s. The answer is yes and no.
While no-fault insurance laws frequently come up for debate during legislative sessions, so far, no one can agree on any potential changes. So, for now, the state no-fault insurance laws are here to stay.
Understanding Florida’s Minimum Insurance Requirements
Before diving into the state’s minimum PIP requirements, it’s a good idea to remember these laws date back to the 1970s. This will help the minimum requirements make a little more sense when you realize the law is still going off the average cost of living in the 70s.
So, how much PIP insurance do you need to stay legal in Florida? The low amounts will probably be a little surprising. However, once again, remember the state hasn’t made any significant changes to the insurance requirements in several decades.
The minimum PIP requirements are as follows:
- $10,000 per person for medical and disability benefits. These benefits cover the vehicle owner and any passengers. The benefits can also apply if a relative residing in the same residence as the vehicle owner is injured while driving. For example, if a spouse or child who shares the same address as you is injured in an accident while driving your vehicle, your PIP policy will cover part of the medical and/or disability expenses.
- $5,000 in death benefits. The same terms apply to PIP death benefits. If the vehicle accident results in a fatality, PIP pays around $5,000 to help cover funeral expenses. This coverage also applies if the driver or passenger passes away due to injuries sustained in the accident.
The law surrounding PIP is a little complicated. The coverage actually extends to any injuries caused by maintaining or using the motor vehicle.
In other words, you don’t necessarily need to be involved in an accident with another driver for PIP benefits to kick in. You or a passenger can be injured simply by changing a flat tire or the oil. If this happens, PIP generally covers some of the medical costs.
Filing a Claim After PIP Pays Out
PIP will cover 80% of your or your passenger’s medical expenses up to $10,000. The insurance pays 60% of disability costs, up to $10,000.
Death benefits are a flat $5,000 payout. Unfortunately, there aren’t any exceptions to these caps. This means most drivers are left with outstanding medical expenses. Even a trip to the emergency room can run you well over $10,000.
Don’t forget PIP also doesn’t cover property and non-economic damages like pain and suffering. So, what should you do when an auto accident leaves you with outstanding expenses? This is when you turn to the civil court system.
To recover any damages not covered by PIP, you need to file a lawsuit against the at-fault driver.
Ensuring You Receive Compensation for All of Your Damages
To recoup most or all of your losses stemming from an auto accident in Florida, you’ll likely need to file a lawsuit against the at-fault driver. This means you need an attorney to help you navigate the often complex legal system.
An attorney can ensure you receive fair compensation, handling all legal aspects so you can focus on getting back to your life.
