Florida’s no-fault law set to expire Oct. 1

A three-week Florida special legislative session scheduled to begin Sept. 18 has been postponed, meaning lawmakers will probably not act to halt the Oct. 1 expiration of a key no-fault auto insurance law.

The session was to focus on a variety of budget and finance issues, though many predicted the pending expiration of personal injury protection (PIP) in automobile insurance policies would be hashed out as well — or at least placed on the session agenda.

Industry groups maintain that if the expiration were to be reversed at this stage in the game, it would create confusion for consumers and a lot of additional work for insurers and agents.

Julie Pulliam, spokesperson for the American Insurance Association, said insurance companies have been preparing for the “sunsetting” of personal injury protection for months. “The postponement kind of clears the way for no-fault to sunset. At this point, there would be massive confusion for consumers and insurers if PIP did not expire,” Pulliam said.

The situation surrounding PIP has raised questions about what property damage coverage is required after Oct. 1.

Property damage question
According to Jeff Grady, president of the Florida Association of Independent Agents, the biggest question now is if property damage will be separated from PIP and remain as mandatory coverage. He said there have been some rumblings to that effect. A lawyer for the state’s motor vehicles department recently said Florida drivers will still need to purchase property damage liability insurance even if the state’s no-fault insurance system disappears Oct. 1.

But the department’s executive director has questioned whether the state will be able to enforce the law requiring the $10,000 minimum coverage.

“It’s a real pickle for agents,” said Grady. “Personal injury protection and property damage have always been parceled together. It would be odd now to say that property damage might be considered more important than personal injury.”

Sam Miller, president of the Florida Insurance Council, said if the Legislature does not come back until October or November, PIP will expire.

“If they come back in late September, which is what we thought likely to happen, and there is an agreement, PIP is saved,” Miller said.

Miller added that it “seems pretty likely” now that PIP will go away and there will be some confusion for insurers, agents and consumers.

But at some point a new auto insurance law could eventually be passed. “It could be during a special session or the regular session next spring. If there is a lot of consumer uproar without PIP and a lot of problems, PIP might be reenacted after a hiatus in some form. If there is no confusion, PIP might be left dead and they might do some clarification of issues and, perhaps, mandate bodily injury liability. It is crazy and confusing right now,” according to Miller.