HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1525 Motor Vehicle Insurance
SPONSOR(S): Grall
TIED BILLS: IDEN./SIM. BILLS: SB 150
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice & Property Rights Subcommittee 15 Y, 3 N Mawn Jones
2) Judiciary Committee
SUMMARY ANALYSIS
The Florida Motor Vehicle No-Fault Law requires certain vehicle owners to obtain personal injury protection
insurance coverage (“PIP”), which provides $10,000 in medical, disability, and funeral expenses, without
regard to fault, subject to a limit of $2,500 for non-emergency medical care. In exchange for providing PIP
coverage, vehicle owners and operators are immune from tort claims within PIP coverage limits.
A vehicle owner must also obtain at least $10,000 in property damage coverage (“PD”), and, at the time of an
accident, show proof of bodily injury (“BI”) coverage of at least $10,000 due to the bodily injury or death of any
one person and $20,000 for the bodily injury or death of two or more persons. An insurance policy or allowable
form of self-insurance is acceptable proof of BI coverage.
HB 1525 repeals PIP. By repealing PIP, the bill removes PIP’s tort liability limitation, making drivers at fault in
an accident fully liable for any damages they cause. Due to this change, the bill also expands the scope of
legal liabilities covered under an uninsured/underinsured motorist policy.
In place of PIP, the bill requires BI coverage at the time of vehicle registration with a minimum coverage limit of
$25,000 for the bodily injury or death of one person and $50,000 for the bodily injury or death of two or more
persons. The minimum PD coverage limit remains unchanged at $10,000. However, the minimum security
limits for self-insurance of BI and PD requirements are increased, as are the minimum coverage limits
applicable to garage liability policies and commercial motor vehicle coverage. Further, the bill requires an
insurance company complying with the new financial responsibility requirements to:
Provide a death benefit of $5,000 for each deceased person upon the death of the named insured,
relatives living in the same household, persons operating or passengers in the insured motor vehicle,
and other persons struck by the motor vehicle and suffering bodily injury while not an occupant of a
self-propelled motor vehicle under certain circumstances.
Offer opt-in medical payments coverage at specified limits with specified deductibles.
Motor vehicle policies issued on or after July 1, 2023, may not include PIP coverage. However, suspensions,
revocations, and anti-fraud measures for actions occurring under the PIP law continue. The bill provides for the
transition of motor vehicle insurance policies issued before July 1, 2023, from PIP to BI/PD and requires
insurers to give their policyholders a notice describing the effect of the bill’s changes by April 1, 2023. The
notice is subject to approval by the Office of Insurance Regulation (“OIR”). Further, the bill allows for a $10,000
setoff on noneconomic damages for a defendant under specified circumstances.
An appropriation of $83,651 is provided to OIR to implement changes made by the bill. The bill will have an
indeterminate fiscal impact on state and local governments. The bill will have an indeterminate fiscal impact on
the private sector.
The bill provides an effective date of July 1, 2023, except as otherwise expressly provided.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 2/7/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Financial Responsibility Law
Florida’s Financial Responsibility Law requires proof of ability to pay monetary damages for bodily
injury (“BI”) and property damage (“PD”) liability arising out of a motor vehicle accident or serious traffic
violation.1 The owner or operator of a motor vehicle, including a motorcycle, is not required to show
proof of BI coverage at the time of vehicle registration. Instead, proof of such coverage is only required
after an accident.2 At that time, a driver proves financial responsibility by furnishing an active motor
vehicle liability policy, a certificate showing a qualifying security deposit with the Department of
Highway Safety and Motor Vehicles (“DHSMV”), or proof of qualifying self-insurance.3
A motor vehicle owner or operator must hold minimum:
BI coverage of at least $10,000 in the event of the bodily injury to or death of one person and
$20,000 in the event of the bodily injury to or death of two or more persons; and
PD coverage of at least $10,000, in the event of damage to property of others; or
$30,000 in combined BI and PD coverage.4
These coverage amounts are often referred to in a summary manner as “$10,000/$20,000/$10,000” or
“10/20/10.” A driver’s license and vehicle registration may be suspended for failure to comply with the
PD and PIP coverage requirements but may be reinstated by obtaining a liability insurance policy and
paying a fee to the DHSMV.5
Each state has financial responsibility laws requiring persons involved in motor vehicle accidents (or
serious traffic infractions) to furnish proof of BI and PD liability insurance. However, minimum coverage
amounts vary among the states.
Motor Vehicle No-Fault Law
Florida’s Motor Vehicle No-Fault Law (“No-Fault Law”)6 requires motorists to carry no-fault insurance
known as personal injury protection (“PIP”) coverage. PIP provides immediate medical, surgical,
funeral, and disability insurance benefits up to the coverage limits after a motor vehicle accident,
regardless of who is at fault. In return for providing such benefits, the No-Fault Law limits the right to
sue in connection to a motor vehicle accident for damages less than available PIP benefits. Most
Florida motorists must carry $10,000 of PIP coverage.7
1 Ch. 324, F.S.
2
Ss. 324.011 and 324.022, F.S.
3 Businesses that choose to self-insure must deposit $30,000 per vehicle, up to a maximum of $120,000, with the DHSMV and maintain
excess insurance with limits of $125,000/$250,000/$300,000. Individuals that choose to self-insure must deposit $30,000 with the
DHSMV. Individuals and businesses can also obtain a certificate of self-insurance to satisfy the financial responsibility requirements. To
do this, individuals must have an unencumbered net worth of $40,000 and businesses must have either an unencumbere d net worth of
$40,000 for the first vehicle and $20,000 for each additional vehicle or a sufficient net worth as determined by DHSMV rule. Currently,
the applicable rule provides that $40,000 for the first vehicle and an amount less than $20,000 for each additional vehicle is sufficient if
the applicant carries excess insurance in the amounts of $25,000/$50,000/$100,000. The amount applicable to each additional vehicle
is determined annually by OIR Rule. Rule 15A-3.011, F.A.C; ss. 324.031, 324.061, 324.161, and 324.171, F.S.
4 S. 324.022, F.S.
5 S. 324.0221(2) and (3), F.S.
6 Ss. 627.730-627.7405, F.S.
7 S. 627.7275, F.S.
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PIP General Provisions
Provision Explanation
Required Coverage All owners or registrants of motor vehicles with four or more wheels, except
school buses, limos, and taxicabs, must carry PIP.8
Individuals Covered The named insured, relatives living in the same house, persons operating and
passengers in the vehicle, and persons struck and injured outside the vehicle.
Tort Limitation Limited exemption from tort liability; injured persons may pursue certain tort
claims as specified by the PIP law.
Benefits $10,000 in emergency medical and disability benefits (limited to $2,500 in medical
benefits for non-emergency medical conditions) and $5,000 in death benefits.
Coverage of 60 percent of lost income due to disability, not to exceed the $10,000
overall benefit limit.
Timely Treatment Medical benefits are paid only if treatment is begun within 14 days of the accident.
Timely Payment Payments are late if not paid within 30 days of insurer’s receipt of written notice.
Medical Reimbursement 80 percent of reasonable medical expenses paid to eligible medical providers. 9
Excluded Treatment Massage and acupuncture are not covered. Services, supplies, or care that are
not reimbursable under Medicare or workers’ compensation are also not covered.
Attorney Fees Prevailing insureds and beneficiaries may receive reasonable attorney fees.
PIP in Other States
Over the last 20 years or so, 25 jurisdictions have repealed their No-Fault laws or made them non-
compulsory.10 Only 16 jurisdictions now have compulsory PIP laws, only nine have No-Fault laws, and
only five, including some without compulsory PIP laws, give the insured the option to choose No-Fault
protections, as noted in the chart below:
Jurisdiction Compulsory PIP No-Fault
Delaware Yes No
District of Columbia No Optional
Florida Yes Yes
Hawaii Yes Yes
Kansas Yes Yes
Kentucky No Optional
Maryland Yes No
Massachusetts Yes Yes
Michigan Yes Yes
Minnesota Yes Yes
New Jersey Yes Optional
New York Yes Yes
North Dakota Yes Yes
Oregon Yes No
Pennsylvania No Optional
Texas Yes Optional
Utah Yes Yes
Virgin Islands Yes No
Washington Yes No
Recent Legislative History
8 This includes a non-resident keeping a vehicle in Florida for more than 90 days during the previous 365 days. S. 627.733(2), F.S.
9 Insurers may limit reimbursements to a fee schedule tied to the Medicare allowed amount. For many services, 80 percent of 200
percent of the Medicare allowed amount is the standard reimbursement. S. 627.736(5)(a)1., F.S.
10 National Assoc. of Ins. Commissioners, Final Auto Study Group Report (Nov. 18, 2014) and Ins . Information Institute, Compulsory
Auto/Uninsured Motorists (Sept. 2017), http://www.iii.org/issue-update/compulsory-auto-uninsured-motorists (last visited Feb. 7, 2022).
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The Florida Legislature revised the PIP law multiple times after a statewide grand jury found rampant
PIP fraud, including in 2001 and 2003. The 2003 legislation provided for PIP repeal through a sunset
provision effective October 1, 2007, and a bill extending PIP’s sunset was vetoed, resulting in the law
expiring in 2007. However, after a 2007 Special Session, the PIP law was revived effective January 1,
2008, and the Legislature again revised the PIP law in 2012.
PIP Reform
The reforms enacted between 2001 and 2012 included:
Establishing requirements for and limiting access to motor vehicle crash reports;
Limiting medical services, reimbursement, and eligible providers;
Requiring provider licensing;
Requiring pre-suit demand letters;
Increasing criminal penalties;
Defining certain activities by claims handlers as unfair and deceptive trade practices;
Limiting benefits for emergency and non-emergency medical conditions; and
Limiting attorney fees.
The 2012 reform required insurers to make rate filings by October 1, 2012, and January 1, 2014, that
provided a minimum of 10 percent and 25 percent decreases in PIP premiums, respectively. However,
this reform allowed insurers to file and the Office of Insurance Regulation (OIR) to approve smaller
decreases or increases, if appropriately justified. This resulted in an estimated average statewide rate
decrease in PIP premiums of 13.2 percent, as of January 2014. 11
PIP Repeal Proposals
The PIP law has been the subject of multiple repeal proposals over the last several years. The Florida
House of Representatives (“House”) considered bills in 2013, 2014, 2015, 2017, 2020, and 2021 that
would have repealed PIP and required increased BI coverage under the Financial Responsibility Law.12
A 2016 bill would have repealed PIP, effective January 1, 2019, but would have maintained current BI
and PD requirements. Except for 2017, the House bills died in the Insurance & Banking Subcommittee.
CS/HB 1063 (2017) passed the House on April 19, 2017, and died in the Senate Appropriations
Subcommittee on Health and Human Services. In 2020, the House considered HB 771, which passed
all committees of reference but died on the House floor. In 2021, the House considered HB 719, which
passed the House as CS/CS/SB 54; however, on June 29, 2021, Governor DeSantis vetoed CS/CS/SB
54, stating that the bill “does not adequately address the current issues facing Florida drivers and may
have unintended consequences that would negatively impact both the market and consumers.” 13
Recent Changes
As part of a pair of broader insurance-related bills, the Legislature amended the PIP law in 2015 and
2016. HB 165 (2015) clarified the application of the PIP medical reimbursement fee schedule. HB 165
(2015) and HB 659 (2016) each created an additional exemption from a licensure requirement under
the PIP law that allows reimbursement of certain health care clinics for PIP-related medical services.
Recent OIR Reports
PIP Data Call
HB 119 (2012) required OIR to perform a comprehensive PIP data call and to report the results. Thirty-
five insurers representing 83.5 percent of the market participated in the data call, including the top
11 Michael Adams, Report Finds Florida PIP Reforms Helping to Lower Rates, Insurance Journal (Jan. 24, 2014),
https://www.insurancejournal.com/news/southeast/2014/01/24/318288.htm (last visited Feb. 7, 2022).
12 Ch. 324, F.S.
13 Veto Letter of Ron DeSantis, Governor (June 29, 2021), https://www.flgov.com/wp-content/uploads/2021/06/SB-54-Transmittal-
Letter.pdf (last visited Feb. 7, 2022).
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twenty-five insurers by market share; however, the report did not rely on information from several
insurers due to data quality issues. OIR published its data call analysis on January 1, 2015, addressing:
1. Quantity of personal injury protection claims.
2. Type or nature of claimants.
3. Amount and type of personal injury protection benefits paid and expenses incurred.
4. Type and quantity of, and charges for, medical benefits.
5. Direct earned premiums for personal injury protection coverage, pure loss ratios, pure premiums,
and other information related to premiums and losses.
6. Licensed drivers and accidents.
7. Fraud and enforcement.
While OIR did not provide a summary of its findings in the body of the report, it summarized its findings
in a press release dated January 5, 2015:14
The findings showed a general decrease in the per-claim costs and the overall
number of claims (frequency and severity) for PIP since the implementation of
HB 119 on January 1, 2013. The regional analysis concludes that South Florida
and the Tampa/St. Petersburg regions experienced the most significant
decreases in Florida. However, the data also exposed that other coverages, such
as [BI] and Uninsured Motorists (UM), experienced increases in both frequency
and severity when some benefits covered under PIP moved to these coverages.