A 2021 study by the Insurance Research Council found that more than 20% of Florida drivers are uninsured. Mississippi has the highest percentage of uninsured drivers, a statistic that correlates with having the highest poverty rate. That correlation breaks down in Florida. While Florida has the nation’s 16th highest poverty rate, it has the sixth-highest rate of uninsured drivers. The decision to be uninsured in Florida is not entirely caused by low incomes.

Every state except Florida requires car owners to purchase bodily injury insurance coverage, although a couple of states allow owners to prove their financial responsibility in lieu of purchasing insurance coverage. Bodily injury (BI) insurance pays compensation to a victim of injuries caused by the insured driver’s negligence. It is a form of financial protection that safeguards income and property that an injury victim might be entitled to seize if the victim’s damages are not paid by insurance.

Instead of mandating BI insurance, Florida requires drivers to purchase personal injury protection (PIP) insurance and property damage insurance. An injured driver is often limited to making a claim against his or her own PIP coverage. The coverage pays 80% of medical bills and 60% of lost wages, up to $10,000. Current Florida law allows insurers to limit payment to $2,500 if the victim did not receive medical treatment within two weeks of the accident and did not suffer from an “emergency medical condition.”

Florida car accident injury victims are precluded from suing a negligent driver unless their medical expenses and wage loss exceed $10,000. The victims must also prove that their injuries are permanent, including significant scarring. Victims who can meet that standard may sue the negligent driver for pain and suffering in addition to their medical expenses and lost wages. However, unless the driver who caused the accident has BI coverage, the injury victim may have difficulty collecting damages.

Florida’s PIP system is a failed experiment. Most states that enacted PIP laws have repealed them. Insurance companies promised that no-fault laws and limitations on the ability to sue would cause claims to be processed efficiently and inexpensively. The reality is that PIP claims are more expensive to process than traditional fault-based claims.

The Problem of High Insurance Premiums

The Personal Insurance Federation of Florida (PIFF) is an advocacy group for the insurance industry. Whenever proposed legislation would place the interest of consumers above the profits of insurance companies, the PIFF lobbies the legislature to side with insurers rather than consumers. The PIFF is a powerful voice among legislators that depend on the insurance industry for campaign donations.

According to PIFF, the high percentage of uninsured drivers in Florida is caused by high insurance premiums, which it attributes to “well known litigation abuse.” Unfortunately, insurance companies feel abused whenever they are sued. Yet the story is much more complicated than PIFF wants the Florida legislature to believe.

The reality is that Florida has one of the highest car accident rates in the nation. Florida also has third-highest rate of fatal car accidents. More accidents lead to more claims and more insurance payouts. Congested roads, an increase in distracted driving, and soaring vehicle repair costs are among the many factors that contribute to high insurance premiums in Florida.

If PIFF focused on making roads safer for drivers, bicyclists, and pedestrians, it might be viewed as pro-consumer while still serving the interests of its members. Instead, it lobbies for changes in the law that inevitably make it more difficult for injury victims to recover fair compensation. Reducing the compensation maximum from $10,000 to $2,500 in the absence of “emergency care” is a recent example of a “reform” that PIFF championed at the expense of injury victims.

Car insurance rates are indeed high in Florida, despite the insurance industry’s promise that the state’s PIP law would reduce the cost of insurance. That promise was hollow. Premiums in states with PIP laws have skyrocketed for decades. That fact explains why most states that enacted PIP laws have abandoned them.

Insurance fraud is not the only reason for high premiums, notwithstanding arguments made by PIFF, but fraud does contribute to high premiums in PIP states. Since PIP makes no payment for pain and suffering and caps payments for wage loss, injury victims may be tempted to exaggerate injuries to obtain fair compensation for their injuries. In states where accident victims receive full compensation after proving fault, the litigation process discourages fraudulent claims. The PIP system encourages accident victims to exaggerate injuries so they can recover the compensation that injury victims receive in most other states.

The governor vetoed a law that would have replaced PIP with traditional insurance coverage. The PIFF supported that veto after arguing that its latest menu of “reforms” would reduce premiums. Every time the legislature enacts a “reform” advocated by PIFF, honest injury victims encounter another roadblock to receiving fair compensation. In the meantime, insurance premiums continue to rise.  

The Importance of Uninsured Motorist Coverage

Given the number of uninsured drivers in Florida, the odds are at least one-in-five that the victim of a serious injury will recover no compensation from a driver whose carelessness caused a car accident. Drivers face crushing medical bills, long-term wage loss, and the high cost of coping with a disability when they are injured by an uninsured river.

To protect against those consequences, it makes sense for every Florida driver to purchase uninsured motorist coverage. Uninsured motorist coverage pays the compensation that an at-fault driver would be required to pay when Florida law holds that driver accountable for the negligent infliction of injuries. In essence, the injury victim makes the same claim against his or her own insurance company that the driver would have been entitled to make against the at-fault driver if that driver had been insured.

Injury victims must exhaust their own PIP benefits before they can collect uninsured motorist benefits. They are also subject to the coverage limit and deductible they selected when they purchased their uninsured motorist coverage. Since medical bills and a permanent disability can lead to a financial crisis, it makes sense to purchase the highest coverage limit that a car owner can afford.