Senate Bill 54 Update

As an update to a prior posting, the Florida Legislature has accomplished what has previously seemed improbable, if not impossible – PIP (Personal Injury Protection) reform. Senate Bill 54 has passed both the Florida House and Florida Senate, and the only question that remains is will Governor Ron DeSantis exercise his veto authority over the controversial bill. Should he sign the bill into law (or exercise his option to not sign the bill, where it would still become law), the law would go into effect on January 1, 2022.

While there were numerous versions and revisions to the bill as it made its way between the House and Senate, as passed, Senate Bill 54 will require drivers to maintain bodily injury coverage in the amount of $25,000 per person and $50,000 per occurrence. Previous iterations of the bill called for mandatory MedPay coverage; however, the final version of the bill only requires the insured to carry a MedPay death benefit of $5,000. The bill does require insurers to offer MedPay coverage of $5,000 or $10,000, but again, selecting this coverage is optional for the insured. As noted above, the bill, if passed into law will go into effect on January 1, 2022, at which time carriers will not be allowed to even offer PIP benefits as a coverage option. Any policy issued before this date, in compliance with the Florida Motor Vehicle No-Fault Law, will be effective until the policy is renewed, nonrenewed, or cancelled. Notably, the bill also requires insurers to notify policyholders by September 1, 2021, of the new financial responsibility requirements within the bill.

Unfortunately, Senate Bill 54 was passed without any significant research on what its actual effects will be and if it will readily address the fraud concerns that surrounded PIP or simply shift fraud to a new area. Recently, The American Property Casualty Insurance Association (APCIA) estimated SB 54 will cause the average Florida automobile insurance policy to increase approximately 23% (or $344), while drivers who carry minimum coverage currently could see rates increases upwards of $800/year. With Florida already having almost 20% of its drivers uninsured, it seems unlikely that increased rates will cause more people to carry insurance.

At this point, it is not clear whether Gov. DeSantis will exercise his veto authority or not. Be on the lookout for additional updates!

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