Florida House moves auto insurance changes closer to passage. Impact on rates uncertain

Representatives from State Farm, GEICO, Progressive and multiple insurance trade organizations came out against a sweeping overhaul of Florida’s automobile insurance laws proposed by state lawmakers this session.

Insurance companies warned state lawmakers on Monday that up to 45% of Florida motorists could see their rates rise if lawmakers choose to do away with the state’s 50-year-old “no-fault” laws and increase the minimum amount of insurance motorists would be required to carry.

“It will have a significant rate increase for 35 to 45 percent of Floridians,” Doug Bell, a lobbyist for Progressive, told lawmakers.

Those rates would rise primarily for poorer Floridians, they said, while rates for people who already carry more than what lawmakers are proposing could see some rates fall.

Fed up with Florida’s sky-high auto insurance rates, which consistently rank among the five highest in the nation, legislators are close to passing the largest changes to the state’s insurance laws in decades.

The bill would do away with Florida’s “no-fault” auto insurance laws, which require Floridians to carry $10,000 in coverage for their own medical, disability, and funeral expenses, known as “personal injury protection” coverage.

That coverage pays out regardless of who was at fault in an accident — the reason why Florida is a “no-fault” state. (Contrary to popular belief, it does not mean that fault is not assigned in an accident.)

Lawmakers are proposing doing away with the “no-fault” statutes and the $10,000 in coverage.

New minimum insurance requirements

Instead, they would require everyone, when they register a vehicle, to have a minimum of $25,000 for the injury or death of one person and $50,000 for two people. Florida is one of just two states that does not require bodily injury coverage. The $10,000 in property damage coverage currently required would not change.

Proponents believe that rates would fall by requiring more coverage on Florida’s roadways — and eliminating “personal injury protection,” which they say is riddled with fraud. The bill would also push the responsibility in accidents on to the insurance policy of the person at fault in the accident.

No one knows for certain what the proposal would do to rates, however. Because the current version of the bill was introduced just last week, the state has done no independent analysis showing what its impact would be.

Opponents warn it could exacerbate one of the reasons why Florida’s rates are so high: An estimated one in five motorists aren’t insured — one of the highest rates in the country.

That number could rise if the bill passes. Anyone who currently carries the minimum insurance would likely pay more, simply because they would be required to carry more insurance.

Bell said after the meeting that 45% of Progressive’s customers in Florida carry less than what would be required if the bill passed, and that those people are susceptible to dropping coverage altogether. He said insurers wanted lower rates, because it draws more customers.

“We want to sell lower-cost coverage, because that means more people are buying insurance.”

Industry ‘scare tactics’?

The bill sponsor, Rep. Erin Grall, R-Vero Beach, derided insurance companies’ warnings as “scare tactics” and “disingenuous.”

“The research just doesn’t bear out that we’re going to see increases,” Grall said afterward.

Lawmakers expressed frustration that the state has no clear idea what the bill would do.

“We simply have to have the data,” said Rep. Tommy Gregory, R-Sarasota. “We simply have to have it.”

The bill now heads to the House floor, and appears headed to Gov. Ron DeSantis’ desk.

The Senate quickly passed its own version of the bill Wednesday night just a day after it was introduced, the result, senators said, of hours of negotiations between trial lawyers, insurance companies and hospitals.

After the Senate passed its bill, the House fast-tracked its own, bypassing one committee so the bill could more quickly make it to the House floor. The House also changed its bill Monday making it nearly identical to the Senate version. Both chambers have to pass the same bill before it can go to DeSantis.

The bill’s unusual path this session is “highly concerning,” said Logan McFaddin, assistant vice president of state government relations for the American Property Casualty Insurance Association, an industry trade group.

“How can Floridians trust the process when it is not being followed?” McFaddin said in a statement.