I Like No-Fault Insurance Because State Farm Does Not

One advantage to practicing law in Florida for over 36 years is the perspective you have of automobile insurance in our state.

Prior to 1972 the No-Fault system and coverage did not exist. The insurance industry in Florida and across the nation did not like that situation. It argued for the need to enact restrictions on the right to sue for damages as a result of an automobile accident and to create the Personal Injury Protection insurance benefit (PIP), commonly called No-Fault.

Since 1972 Floridians have had to purchase $10,000 of PIP coverage (for medical expenses and lost income) along with whatever liability and other traditional coverages they desired.

At first, I was against PIP (No-Fault). Then, as thousands of clients were benefited greatly by the relatively prompt payment of medical expenses and lost income I became a supporter.

Now, with No-Fault scheduled to sunset in October, 2007, unless the Legislature acts to save it, I have become an advocate for retention of the system. My support of the present system (which could use some tweaks) is bolstered by the obvious enthusiasm of some insurance companies for its impending demise. The following article posted at tampabays10.com is an example.

State Farm would cut car insurance rates if no-fault expires

WINTER HAVEN, Florida (AP) — State Farm says it will cut its car insurance rates by about 16 percent if the state’s no-fault accident system ends in October as scheduled.

In a state regulatory filing, State Farm says its customers can expect to save about $360 a year on average for a two-car household if the state’s no-fault auto insurance system isn’t retained by state lawmakers. The individual changes will vary widely depending on coverages, discounts, geography and driver and car details.

The no-fault system requires drivers to get $10,000 in personal injury protection coverage, but puts restrictions on people’s right to sue if they are hit in an accident and injured.

The system was meant to try to lessen the number of lawsuits. But some insurance companies say it has been beset with fraud.

Notice the beset with fraud line. My observation of the No-Fault system over a 34 year period is that fraud is minimal, but the system is beset with incompetent claims processors within the insurance industry. But, as they say, that is another story.