No-Fault Auto Insurance Requirement Back in Force in Florida Jan. 1

Florida drivers will have personal injury protection coverage added to their policies Jan. 1 as the state returns to a no-fault system after a three month break.

Most people won’t have to do anything to comply with the new law. Many never got rid of PIP coverage during the three months when it wasn’t required, and for those who have insurance without PIP, their company should add it on to their policy automatically starting Tuesday.

But some drivers will notice the change when their next bill comes. Those who dropped the $10,000 coverage for injuries sustained in wrecks to save some money, will again be paying the premium for the coverage.

But some companies also are lowering their premiums, because they say new anti-fraud measures contained in the new law will reduce losses.

PIP coverage pays the first $10,000 of medical costs for injuries from a car crash, regardless of who was at fault. It was put in place in the early 1970s to avoid lengthy court fights over who is at fault in an accident so medical bills can be paid quickly.

But over the years, the system became heavily burdened with fraud. There were fake crashes that sent people to fake health care providers for fake injuries that were then submitted as PIP claims. Pushed by big insurance companies tired of paying fraud claims, lawmakers let the requirement expire Oct. 1.

But health care providers complained that without mandatory PIP, lots of people without health insurance wouldn’t have anyone to pay their bill if they were in an accident.

After a long fight, lawmakers crafted a bill to restore the system with several provisions aimed at reducing fraud, mostly limits on what certain health care clinics can charge and how they can operate.

The Florida Insurance Council, which represents many insurers, said there are an estimated 8 million drivers in Florida, but it’s believed only a few hundred thousand have been without PIP coverage since the requirement went away in October.

State officials are reminding drivers that they need to have the coverage again starting Tuesday, although drivers with insurance policies will have it automatically added back to their coverage.

Still, drivers should “talk to your agent, make sure all the right coverage is there, make sure you’re current on your payment,” said Dan Tarantin, CEO of Direct General Insurance Co., which operates Florida No Fault Insurance Co. and Cash Register Insurance.

Those companies are among those lowering rates, banking that fraud will mean lower losses.

Not all insurers agree. State Farm — one of the state’s biggest insurers — argued against renewing the PIP requirement, saying that it won’t do enough to reduce fraud. The company continues to argue that drivers ought to have a choice whether or not to have PIP coverage.