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Florida No-Fault: Pros and Cons

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The Legislature decides October 1st, 2007 if the personal injury protection (PIP) part of the Florida no-fault auto insurance law will “sunset” after being in use for 36 years. If PIP is not renewed, drivers will no longer be required to buy the minimum $10,000 coverage for PIP and will be able to bring law suits against other drivers in auto accidents.

The proponents of getting rid of PIP, mainly insurance companies, say that getting rid of the law will lower insurance rates. The average family savings could be up to $360 a year and State Farm has claimed that they will lower rates 16% for two car households if the law is done away with. Florida’s PIP statute is costing Florida drivers over 1.7 billion dollars a year, making Florida’s auto-insurance the 6th highest in the nation. The insurance companies also feel that this will reduce fraud and eliminate duplicate coverage. Advocates say that getting rid of PIP will hold drivers responsible for their accidents and will leave them more choices in choosing their own coverage.

The critics, however, assert that by abolishing this law, hospitals and trauma centers will bear the costs of patients that don’t have health care insurance. In Florida, treating uninsured patients could cost up to $350 million a year. Consumer advocates believe that drivers will end up paying even more for insurance because they will have to add more coverage to protect themselves from uninsured drivers. Experts believe the number of uninsured drivers will be high; many people may simply go without the coverage if they’re not required to have it.

Auto-insurance companies may not cover medical expenses unless the customer selects and pays extra, which many people may be unaware of. The courts will also be full of accident-related suits. If the no-fault law expires, people will be able to file suit against other drivers for auto accidents. People will have to pay one way or the other, with or without this law.