Personal Injury Protection— Florida

Personal Auto No-Fault Endorsement

July 2008

Who Is Insured; Other Definitions

Florida no-fault coverage applies to the named insured or any family member with respect to injuries sustained while occupying any motor vehicle or as a pedestrian through being struck by a motor vehicle. Other persons are covered for injuries sustained while occupying the named insured's covered auto, or as a pedestrian struck by the named insured's covered auto. For purposes of the no-fault endorsements, “pedestrian” takes on a broad meaning—a pedestrian is “a person who is not 'occupying' a self-propelled vehicle.”

As defined in the endorsement, a “named insured” includes the person named in the declarations and that person's resident spouse. A “family member” is defined as “a person related to the 'named insured' by blood, marriage or adoption who is usually a resident of the 'named insured's' household,” including wards or foster children.

The endorsement adds “medically necessary” as a definition. There are three criteria that apply to a service or supply that a prudent physician would provide for preventing, diagnosing, or treating an illness in order for it to be defined as medically necessary. Those criteria are that the service or supply is in accordance with generally accepted medical standards, is clinically appropriate in terms of type, frequency, extent, and duration, and is not primarily for the convenience of the patient, physician, or other medical provider.

The endorsement defines a “motor vehicle” as any self-propelled vehicle with four or more wheels that is designed and required to be licensed for use on Florida highways, including trailers and semi-trailers. The endorsement further states what a motor vehicle is not: any motor vehicle that is used in mass transit other than public school transportation; that is designed to transport more than five passengers and is owned by a municipality, transit authority, or political subdivision of the state. A mobile home is also not considered a motor vehicle.

A “covered auto” means a motor vehicle owned by the named insured and for which security is required to be maintained under Florida law. For the purposes of this endorsement, a motor vehicle is deemed to be owned by a person if that person holds legal title, is a debtor having the right to possession, or is a lessee having the right to possession.

The definition of “occupying” found in the PAP (2005 edition) is amended to mean “in or upon; entering into; or alighting from.”

 

Insuring Agreement

The insuring agreement states that payment will be made to or for an insured who sustains bodily injury caused by an accident arising out of the ownership, maintenance, or use of a motor vehicle. Four types of personal injury protection benefits are provided: medical expenses, work loss, replacement services expenses, and accidental death. 80 percent of reasonable, medically necessary expenses are covered. Such expenses include medical, surgical, x-ray, dental, ambulance, hospital, nursing and rehabilitative services, and prosthetic devices. Expenses are reimbursed only when they are lawfully provided, supervised, ordered, or prescribed by a health care provider/facility authorized under the no-fault law. Removed from this section is coverage for remedial treatment and services for an insured that relies upon prayer alone for healing in accordance with the insured's religious beliefs. Other, non-religious medical expenses are still covered. For example the setting of the broken leg in a cast by a physician is covered, but the expenses to take the insured to a particular religious leader for healing prayers are not covered.

Work loss applies to loss of income and earning capacity from inability to work proximately caused by injury. Endorsement PP 05 54 provides recovery of 60 percent of such loss, the legally required minimum, and offers the named insured the option of eliminating (with a corresponding premium reduction) work loss benefits altogether for either the named insured alone or for the named insured and dependent family member. Work loss does not include any loss after the death of an insured.

Replacement services expenses are all expenses reasonably incurred in obtaining ordinary and necessary services to replace those that the insured would have performed for the benefit of the household had he or she not been injured. Keeping grass cut or housecleaning are two examples of replacement services.

An accidental death benefit of $5,000 per individual is the final personal injury protection benefit available.

Except for the death benefit, no specific dollar limits are prescribed for the individual benefit categories contained in the endorsement. However, the limit of liability for all loss to any one person in any one accident is $10,000.

While a Florida anti-stacking law exempts from its provisions—and therefore allows stacking of benefits under—automobile policies insuring different named insureds, a state district court of appeal refused to apply this exemption to no-fault insurance in Travelers Indemnity Co. v. Gorman, 404 So. 2d 1147 ( Fla. App. 1981). The court held that the Florida no-fault statute prescribed a total limit on no-fault benefits to any one person for any one injury of $10,000. (See No-Fault Automobile Insurance for an illustration of how an overall no-fault limit governs recovery in individual benefit categories.)

Benefits payable under the endorsement are reduced by any amounts of workers compensation recoveries for the same elements of loss.

When no-fault benefits are available from more than one insurer, the liability of each is prorated. If an injury occurs to a person occupying or hit by a leased or rented automobile, no-fault benefits provided under the lessor's policy are primary unless a declaration to the contrary is printed in bold type on the face of the leasing agreement.

 

Exclusions

Coverage under the named insured's policy does not apply to anyone else who must maintain statutorily required no-fault coverage or to anyone else, other than the named insured or any family member, who is entitled to no-fault benefits from the owner of another vehicle, whether the owner actually has no-fault insurance or not.

Other exclusions rule out coverage 1) for the named insured or any family member while occupying a motor vehicle owned by the named insured but not insured under the policy; 2) for anyone operating the named insured's covered auto without the named insured's consent; 3) for anyone injured while occupying a motor vehicle located for use as a residence or premises; 4) for anyone who injures himself intentionally; and 5) for anyone injured while committing a felony. There is also no personal injury protection coverage for any pedestrian, other than the named insured or any family member, who is not a legal resident of Florida . Visitors to the state would have to rely on the medical payments coverage of their own personal auto policies.

Not an exclusion, but one of the general provisions, is a preclusion of coverage for an insured who has committed, by material act or omission, any insurance fraud relating to PIP. Any fraud voids all coverage arising from a claim with respect to the insured who committed the fraud, and any benefits paid prior to the discovery of the fraud are recoverable from the insured.

Limit of Liability

The limit of liability shown in the schedule is the most payable for each insured in any one accident regardless of the number of insureds, policies, vehicles involved, or claims made. Any amounts payable are reduced by any payments eligible under workers compensation laws. Accidental death is not subject to a deductible, and the deductible is applied to other coverages before any percentage limitation is applied.

The new form has removed the limitations for certain specified tests. The form now states that coverage may be limited by the schedule of maximum charges for services as prescribed in the no-fault law. Notice the use of the word may; it's possible that the maximum limits will be applied, but it's not a certainty.

The payment of death benefits is now explained in the form and payment is the lesser of the amount shown in the declarations or the aggregate limit for benefits minus any payments for medical expenses, work loss, and replacement services.

 

Other Provisions

The premium for any coverage under part A, B, or C is provisional and subject to recomputation. This comes into play in the event of any change in the rules, rates, rating plan, premiums, or minimum premiums applicable because of an adverse judicial finding as to the constitutionality of the Florida no-fault law.

The policy territory is Florida , except in the case of the named insured or any family member occupying “your covered auto,” or the named insured while occupying a motor vehicle owned by a “family member” for which security is maintained as required by the Florida Motor Vehicle No-Fault Law. In these instances the policy territory is expanded to include the remainder of the United States, its territories or possessions, or Canada .

Benefits not paid within thirty days after written notice of loss are considered overdue. The insurer may pay any benefits directly to the insured or to the person or organization providing services or supplies. Claims will not be paid to brokers, persons making claims on behalf of brokers, or clinics not licensed by the Florida Department of Health that are required to be.

If a person seeking personal injury protection coverage is charged with committing a felony, the insurer can withhold benefits until the prosecution formally decides not to prosecute the case, the charge is dismissed, or the person is acquitted.

Provisions for legal action against the insured have been changed and the carrier now has thirty days, not fifteen, to make payment from the date of receipt of a demand letter. The insured cannot bring suit against the carrier if the payment has been made within thirty days. The policy now states that no person or organization has the right to bring the carrier into any action to determine the liability of the insured. Also, all claims related to the same provider for the same insured will be brought in one action unless good cause can be shown as to why the claims should be brought separately. This is an attempt to prevent numerous related claims from crowding the legal system.

Extended Personal Injury Protection Coverage

Higher levels of coverage than are provided by endorsement PP 05 54 may be obtained under the extended personal injury protection coverage endorsement PP 05 66. The endorsement may be chosen only if no PIP deductible has been elected. Also, it is not available if the exclusion of work loss is applicable to the named insured only.

While retaining the $10,000 overall limit, PP 05 66 increases medical expense recovery to 100 percent and work loss recovery to 80 percent for the named insured and any family members. For any other insured, the amounts of payment remain at 80 percent and 60 percent respectively as on PP 05 54.

The exclusions, definitions, and conditions of both forms are the same. The same changes as listed previously under the basic personal injury policy regarding the removal of payment for prayer services, the use of the schedule of maximum charges and the payments for death benefits are made here.

A further extension of benefits may be arranged through the use of added personal injury protection endorsement PP 05 55 01 08, which eliminates the $10,000 overall maximum and substitutes a schedule of overall limits applicable to medical expenses, work loss, and replacement services expenses for each automobile covered under the endorsement. The endorsement may be attached only if extended PIP has been chosen, and if no PIP deductible has been selected. This additional coverage, like that provided under the extended personal injury protection endorsement, applies only to the named insured and family members. Coverage afforded under this endorsement is excess to any applicable extended personal injury protection benefits. The same changes regarding use of the schedule of maximum charges and death benefit provisions are made here.

Tort Liability

Provisions of the Florida no-fault statute creating tort liability exemption for owners, registrants, operators, and occupants of motor vehicles in compliance with the law do so on the basis of a verbal threshold rather than a dollar amount. Damages are covered only when the injury involves significant and permanent loss of an important bodily function, significant and permanent scarring or disfigurement, permanent injury other than scarring or disfigurement, or death. (See No-Fault Automobile Insurance for a general discussion of tort liability exemption in connection with no-fault coverage.)

Vehicle damage remains under the tort system.