Insurers Outline Consequences of No-Fault Law Expiration in Florida

September 27, 2007

For the vast majority of policyholders, nothing will change on Oct. 1. Policyholders will still maintain the insurance coverage they had in place on Sept. 30 for the duration of their contract.

Auto insurance policies are renewed every six months or every year and as such, insurance companies will respect those valid contracts for the duration of the contract period.

What will change is the statutory requirement that drivers maintain a policy with PIP (personal injury protection) and the requirement that motorists meet certain standards before suing an at-fault driver or even their own insurance company for losses, including pain and suffering.

By law, insurance companies must provide policyholders with a renewal notice at least 45 days in advance of the expiration of a policy, and that’s where some of the confusion is coming in.

In anticipation of the state law mandating PIP coverage expiring on Oct. 1, companies have different ways of handling the expiration of PIP. Generally, however, companies have included PIP coverage for any of the renewals that took place before Oct. 1, and in the renewal notices, have noted that PIP benefits will be deleted from those policies effective Oct. 1 if no action is taken by the Legislature to extend PIP beyond the Oct. 1 scheduled sunset.

Companies would then adjust the policyholder’s remaining coverage premium and send the policyholder an amended declarations page to reflect the policy changes.
In addition, companies are offering policyholders as a type of replacement PIP coverage, the option of purchasing expanded Medical Payment coverage limits to help pay medical expenses for the driver and any of his or her passengers.

What is confusing to many policyholders is the on-again, off-again discussions regarding some sort of legislative re-enactment of PIP.

While the legislature seemed poised to allow PIP to expire when lawmakers took no action on it in the regular session earlier this year, it appeared PIP would expire on schedule on Oct. 1.

It appears now that the Legislature has come to some sort of an agreement to reenact and/or reform current PIP provisions when they return to Tallahassee in special session on Oct. 3.

The Senate and House have released bills currently under review. Each legislative chamber has scheduled workshops in their respective insurance committees to discuss these bills which basically re-enact PIP with some reforms designed to reduce fraud that the insurance industry agrees is rampant.

Those workshops are set for Oct. 2 – two days after current PIP law sunsets and because of how explosive this controversy has been, it remains possible that the Legislature will deadlock once again and no bill can be passed.

If lawmakers reenact existing PIP law, reform it or create a new state-mandated automobile insurance coverage law, some drivers in Florida will have been without PIP coverage for a short period of time.

Therefore, the Legislature will have to consider how to get those drivers in compliance with any new laws that may be enacted.

Expiration of the No-fault law will make it easier for lawsuits to be filed following an accident. Motorists who are sued will be protected by liability coverages if they have this insurance and most insurance companies will obtain counsel and represent the policyholder in the litigation as they do now.

In the meantime, questions abound about what will happen in the coming days. Chief Financial Officer Alex Sink has developed an excellent internet list of questions and answers regarding life after no-fault expires, and can be viewed at

Source: Florida Insurance Council

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