Florida has demonstrated that insurance reforms do work when well executed. (Credit: michaklootwijk/Adobe Stock)

Another year means another legislative session in Tallahassee.

You know what that means? Florida No-Fault Personal Injury Protection (PIP) is potentially on the chopping block again.

For my nearly three decades in Florida, this has become a seemingly annual ritual, with the legislature often teasing us in their sincerity.

After some significant tort reform gains were made in 2023 and 2024, abolishing PIP may no longer be a pipe dream. Floridians are reaping the benefits of property insurance reform that resulted in 11 new carriers being admitted to the state and multiple carriers seeking rate reductions.

SB 1256 was filed this legislative session and would abolish PIP while increasing liability limits. Both ideas are long overdue.

The challenge for the legislature is this: Can it continue the work started in previous sessions that modified Florida’s pure comparative negligence standard and put much needed guardrails on out-of-control bad faith litigation?

The general consensus among consumer groups and the media is that this will result in a disproportionate number of lower-income residents having to pay more for insurance. While premiums could go up for those who currently drive without coverage, others who do currently carry such coverage, regardless of socio-economic status, will potentially see decreases in premiums.

There also is concern that more Floridians will opt to simply not have insurance. While Florida is already among the leaders in the nation with more than 20% of vehicles on the road being uninsured, this could potentially happen due to the legislature lacking the foresight to penalize those who opt to break the law by barring them from suing for pain and suffering as many other states have done with great success.

From a personal responsibility standpoint, abolishing PIP is the right thing to do. Far too many people drive around with basic mandatory coverage and have had no requirement to be responsible when they injure others. Florida is the ONLY state that has no requirement for drivers to carry basic coverage. While two states (New Hampshire & Virginia) don't require auto insurance, both do have requirements to post some type of bond to protect the general public. This has resulted in Florida uninsured (UM) and underinsured (UIM) premiums being among the highest in the nation.

The second critical factor is that PIP was designed to limit litigation by barring suit for soft tissue injuries. For decades, the majority of injury claims presented by motorists are just that and are most often paid, despite the tort threshold that was supposed to limit these claims. An effective PIP law is only as effective as the enforcement of the thresholds designed to keep litigation in check, which Florida courts have failed to do over and over again.

The third critical factor is fraud. PIP fraud is rampant throughout the state, and PIP litigation has become a highly lucrative cottage industry. While this reform may address both of these costly problems, fraud is not going away. I began my career investigating insurance fraud in south-central Los Angeles, where there is no PIP. It is a tort system used by cappers to enlist pawns to stage accidents and pursue third-party BI claims. Until fraud in Florida is addressed with specificity, it will continue at an ever-increasing rate.

Recommendations for legislators

To truly make this new legislation work for the benefit of consumers, legislators should consider the following:

  • The elimination of PIP creates its own new set of challenges. While it is one less coverage that will be prone to fraud, the shenanigans we see today will simply be pushed to BI and UM (uninsured motorist) line coverages, so any savings will be dubious at best and the fraudsters will have even higher limits to pursue.
  • No pay, no play. Florida needs to bar uninsured motorists from the recovery of non-economic damages, a solution effectively implemented in several states.
  • Cap tort damages for "pain and suffering." Include a "loser pays" provision that applies to not only the plaintiff but their counsel.
  • End vicarious liability which holds vehicle owners liable for injuries caused by permissive users.
  • Take bad faith reforms further and only allow "bad faith" in the rare situations in which an insurer truly does not honor its fiduciary duties. Enact penalties for trial lawyers who engage in so-called bad faith "setups."
  • Allow a reasonable amount of time to investigate suspicious claims.
  • Give law enforcement the teeth necessary to pursue fraudsters while holding insurers harmless during their investigations.
  • Enact caps associated with Medicare and/or workers' compensation on treatment for soft tissue injuries, which comprise the vast majority of cases clogging our courts.
Eliminating PIP is a good idea, as is raising the minimum liability limits and requiring bodily injury coverage. Floridians pay an astronomical amount for uninsured and underinsured coverage so addressing PIP and liability will likely result in sizeable premium reductions on UM and UIM, and on the overall cost to consumers.

This is a step in the right direction in a state that has clearly demonstrated that insurance reforms do work when well executed.

Christopher Tidball is an executive claims consultant, industry speaker and author of multiple claims improvement books, including "Re-Adjusted: 20 Essential Rules to Take Your Organization from Ordinary to Extraordinary." Opinions expressed here are the author's own.

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