Most American states allow car accident victims to sue drivers for injury compensation if the driver’s negligence caused their injuries. Although state laws differ regarding liability when the injury victim shares responsibility for the accident, nearly all states allow the victim to receive some compensation if the victim was less at fault than the other driver. 

To assure that funds are available to compensate accident victims, nearly all states have enacted a financial responsibility law that requires car owners to maintain bodily injury insurance coverage. That coverage is used to pay victims of accidents caused by the negligent acts of an authorized driver of their insured vehicle. Minimum limits for bodily injury coverage vary, but a relatively common minimum is $25,000 for injuries to one person or a total of $50,000 for injuries to multiple victims in the same accident.

Florida differs from nearly all other states by not requiring vehicle owners to maintain bodily injury coverage. While Florida law requires vehicle owners to be financially responsible for accident injuries that they cause, owners do not need to prove that they are financially responsible until the accident occurs.

The reality is that Florida has the highest rate of uninsured drivers in the country. Most uninsured drivers have no ability to pay compensation when they cause an accident.

Florida’s PIP Benefits

About a quarter of Florida’s insured drivers do not purchase bodily injury coverage because they are not required to do so. Rather, Florida law requires owners of vehicles that have at least four wheels to purchase Personal Injury Protection (PIP) insurance plus property damage insurance. Property damage coverage pays for damage to other vehicles caused by an insured driver’s negligence.

A PIP policy is often known as no-fault insurance. A vehicle owner who buys a PIP insurance policy receives compensation from the company that issued the policy. The insurance company pays its insured regardless of fault. However, the amounts that a PIP insurer must pay are quite limited.

The required coverage limit for a Florida PIP policy is $10,000. The coverage is available for medical expenses, for lost income caused by an injury-related inability to work, and for the cost of hiring someone to perform services (such as mowing the lawn) that the injury victim cannot perform. No compensation is available for pain and suffering. The policy must also provide a rather miserly death benefit of no more than $5,000.

The $10,000 coverage limit is often illusory. Unlike other states that have enacted PIP laws, PIP insurance in Florida pays only 80% of the injury victim’s medical expenses. If the injury does not require emergency treatment, PIP insurance covers only $2,500 in medical expenses. The coverage pays only 60% of lost wages, again subject to the $10,000 maximum payment.

Victims don’t receive any medical benefits at all unless they receive medical care within 14 days of the accident. Some injuries take time to develop, but accident victims who assume that they can “walk off” a mild, nagging injury are out of luck if they fail to seek prompt treatment and later discover that the injury is getting worse, not better. Florida law leaves those victims with no medical benefits. That’s exactly the result the insurance industry wanted.

Follow-up services are not covered unless the healthcare provider who first treated the injury either provides the follow-up care or refers the victim to another provider. The insurance company can contest coverage if the new provider treats an accident-related condition that does not fit the specific diagnosis rendered by the initial provider. That provision of the law often allows insurance companies to force victims to pay their own accident-related medical expenses. Again, that’s exactly the result the insurance industry wanted.

Florida Personal Injury Accident Lawsuits

Florida’s PIP law limits the right to sue a negligent driver for personal injuries. A negligent driver who is covered by a PIP policy cannot generally be sued for pain, suffering, or emotional distress. In most states, pain and suffering is the largest component of compensation awarded by a jury in car accident cases. The Florida legislature has decided that an injury victim’s pain and suffering usually has no value at all. That is exactly the result that the insurance industry wanted.

An exception to the “no lawsuit” rule exists when car accident causes an injury victim to experience:

  • significant and permanent loss of an important bodily function;
  • a permanent injury;
  • significant and permanent scarring or disfigurement; or
  • death.

When an injury victim manages to recover compensation from a negligent driver, any compensation that the driver receives from his or her own PIP policy is deducted from the recovery. Since the injured driver paid for those PIP benefits, the driver ends up paying some of the cost of an injury that was caused by another person’s negligence.

While the PIP law was enacted at the request of insurance industry lobbyists, the insurance industry in many states with PIP laws has had second thoughts. According to the insurance industry, many accident victims pretend that they have permanent injuries so that they can recover damages for pain and suffering that the law otherwise denies them. In states that allow every injury victim to recover pain and suffering from a negligent party, the costs to insurance companies are lower. Insurers have consequently supported the repeal of PIP laws in many states.

Governor Vetoes PIP Repeal

Since PIP policies are expensive and the benefits are lousy, it isn’t surprising that Florida leads the nation in uninsured drivers. The Florida legislature recognized the problem and passed a bill that would have improved the lives of accident victims.

The Florida legislature passed SB54, a law would repeal the no-fault PIP system and require vehicle owners to carry at least $25,000 of bodily injury coverage. A study by the Office of Insurance Regulation predicted that insurance rates would be decreased if PIP were repealed.

Florida insurance companies had divided opinions about the repeal. Some believed that a negligence-based system lessens costs, even if damages are not limited, because the incentive for fraud is diminished when accident victims can recover realistic compensation for injuries that are not disabling. Other companies were happy with the no-fault system and its high premiums.

The governor listened to the insurance companies that were happy with PIP. Despite legislative support for a system that would restore fair compensation for injury victims, the governor vetoed SB54.