The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Banking and Insurance
BILL: SB 150
INTRODUCER: Senators Burgess and Rouson
SUBJECT: Motor Vehicle Insurance
DATE: February 2, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Knudson Knudson BI Favorable
2. JU
3. RC
I. Summary:
SB 150 repeals the Florida Motor Vehicle No-Fault Law (No-Fault Law), which requires every
owner and registrant of a motor vehicle in this state to maintain Personal Injury Protection (PIP)
coverage. Beginning July 1, 2023, the bill enacts financial responsibility requirements for
liability for motor vehicle ownership or operation, as follows:
 For bodily injury (BI) or death of one person in any one crash, $25,000, and, subject to that
limit for one person, $50,000 for BI or death of two or more people in any one crash.
 The existing $10,000 financial responsibility requirement for property damage (PD) is
retained.
The bill increases required coverage amounts for garage liability and commercial motor vehicle
insurance. It increases the cash deposit amount required for a certificate of self-insurance
establishing financial responsibility for owners and operators of motor vehicles that are not for-
hire vehicles.
The bill requires insurers to offer medical payments coverage (MedPay) with limits of $5,000 or
$10,000 to cover medical expenses of the insured. Insurers may also offer other policy limits that
exceed $5,000. Insurers must offer a zero deductible option for MedPay, and may also offer
deductibles of up to $500. Insurers must reserve $5,000 of MedPay benefits for 30 days to pay
physicians or dentists who provide emergency services and care or who provide hospital
inpatient care.
The repeal of the No-Fault Law eliminates the limitations on recovering pain and suffering
damages from PIP insureds, which currently require bodily injury that causes death or significant
and permanent injury. Under the bill, the legal liability of an uninsured motorist insurer includes
damages in tort for pain, suffering, disability or physical impairment, disfigurement, mental
anguish, inconvenience, and the loss of past and future capacity for the enjoyment of life.
BILL: SB 150 Page 2
The bill also requires that each insurance policy issued for the purpose of meeting financial
responsibility requirements must include a $5,000 death benefit.
The bill creates a new framework to govern all claims against motor vehicle insurers for bad
faith failure to settle a third-party claim. The bill sets forth best practice claim handling standards
that a motor vehicle insurer is subject to upon the earlier of receiving actual notice of an incident
or loss that could give rise to a covered liability claim and remains subject to the best practices
standards until the claim is resolved. The insurer has a duty to its insured to handle claims in
good faith by complying with the best practices standards. Bad faith failure to settle occurs when
an insurer fails to meet that duty of good faith, which is a proximate cause of the insurer not
settling a third-party claim when, under all the circumstances, it could and should have done so,
had it acted fairly and honestly toward its insured and with due regard for the insured’s interests.
If the insurer meets the best practices standards, the bill provides safe harbors for the purpose of
allowing the insurer a reasonable opportunity to investigate and evaluate the claim. This is done
by establishing time periods during which an insurer does not commit bad faith by failing to
tender policy limits. The safe harbors are available to an insurer that meets the best practices
standards and provide that:
 When one claim arises out of a single occurrence, and an insurer initiates settlement
negotiations by tendering the applicable policy limits in exchange for a general release of
the insured within 45 days after receiving actual notice of the loss, the failure to tender
the policy limits sooner does not constitute bad faith.
 When multiple claims arise out of a single occurrence, the combined value of all claims
exceeds the total of all applicable policy limits, and an insurer initiates settlement
negotiations by globally tendering the applicable policy limits in exchange for a general
release of the insured within 45 days after receiving actual notice of the loss, the failure
to tender policy limits sooner does not constitute bad faith.
 An insurer is not under any circumstances liable for the failure to accept a settlement
offer within 45 days after receiving actual notice of the loss if:
o The settlement offer provides the insurer fewer than 15 days for acceptance; or
o The settlement offer provides the insurer fewer than 30 days for acceptance where
the offer contains conditions for acceptance other than the insurer’s disclosure of
its policy limits.
The bill provides that for any award of noneconomic damages, a defendant is entitled to a
$10,000 setoff if a person suffers injury while operating a motor vehicle which was not in
compliance with the financial responsibility law for more than 30 days immediately preceding
the crash. The setoff on noneconomic damages does not apply if the person who is liable for the
injury was driving under the influence; acted intentionally, recklessness, or with gross
negligence; fled from the scene of the crash; or was acting in furtherance of a felony offense or
in immediate flight from a felony offense. This setoff does not apply to wrongful death claims.
The bill provides that the claimant may file an action to enforce the section and is entitled to an
award of reasonable attorney fees and costs to be paid by the insurer if an insurer fails to timely
comply with the requirements of s. 627.4137, F.S., which requires liability insurers to provide,
within 30 days after receiving a written request from a clamant, a sworn statement setting forth
the name of the insurer, name of the insured, limits of liability coverage, a statement of any
BILL: SB 150 Page 3
policy or coverage defense the insurer currently believes is reasonably available to it, and a copy
of the insurance policy.
The effective date of the bill is July 1, 2023.
II. Present Situation:
Motor Vehicle Insurance
The first recorded motor vehicle accident occurred in Ohio City, Ohio, in 1891.1 Only 6 years
later, the first automobile liability insurance policy would be issued by Travelers Insurance
Company in Dayton, Ohio, protecting the driver if his vehicle killed or injured someone or
damaged their property.2 These coverages today are provided through bodily injury liability and
property damage liability insurance. In 1925, Connecticut passed the first financial responsibility
law requiring owners of automobiles to demonstrate the ability to financially respond when they
are at fault for damages caused to other persons and property. As the automobile became a
ubiquitous part of American life, more states passed financial responsibility laws. Today, every
state has a financial responsibility law regarding owning or operating a motor vehicle.
All states except New Hampshire require the purchase of property damage coverage, which pays
for any damage the insured causes to the property of others.3 Every state, except Florida and
New Hampshire, requires bodily injury liability coverage (BI), which covers an insured that is at-
fault in an accident for damages related to the bodily injuries of others negligently caused by the
insured.4 Bodily injury liability coverage does not provide coverage for an insured’s own
injuries. The most common minimum mandatory limit of bodily injury coverage – mandated by
34 states – is $25,000 in coverage for injuries to any one person and $50,000 in coverage for
injuries to multiple persons, subject to the $25,000 limit for one person. This is often referred to
as limits of $25,000/$50,000. Of the 48 states that require BI coverage, the lowest mandatory
limit is $15,000/$30,000. The highest required limit is $50,000/$100,000. The following table
details the financial responsibility insurance coverage requirements by state:
1
https://ohiohistorycentral.org/w/World%27s_First_Automobile_Accident
2
https://ohiohistorycentral.org/w/World’s_First_Automobile_Insurance_Policy?rec=2597.
3
National Association of Insurance Commissioners, Overview – Auto Insurance
https://content.naic.org/article/consumer_insight_does_your_vehicle_have_right_protection_best_practices_buying_auto_ins
urance.htm (last accessed January 26, 2021).
4
See id.
BILL: SB 150 Page 4
FINANCIAL RESPONSIBILITY REQUIREMENTS BY STATE
ST Minimum Limits (thousands) ST Minimum Limits (thousands)
AL BI 25/50 PD 25 MT BI 25/50 PD 20
AK BI 50/100 PD 25 NE BI 25/50 PD 25 UM 25/50
AZ BI 25/50 PD 15 NV BI 25/50 PD 20
AR BI 25/50 PD 25 NH Financial Responsibility Only5
CA BI 15/30 PD 5 NJ BI6 15/30 PD 5 PIP7 15
CO BI 25/50 PD15 NM BI 25/50 PD 10
CT BI 25/50 PD 25 UM 25/50 NY BI8 25/50 PD 10 PIP 50
DE BI 25/50 PD 10 PIP 15/30 NC BI 30/60 PD 25 UM 30/60/25
FL PIP 10 PD 10 ND BI 25/50 PD 25 UM 25/50 PIP 30
GA BI 25/50 PD 25 OH BI 25/50 PD 25
HI BI 20/40 PD 10 PIP 10 OK BI 25/50 PD 25
ID BI 25/50 PD 15 OR BI 25/50 PD 20 UM 25/50 PIP 15
IL BI 25/50 PD 20 UM 25/50 PA BI 15/30 PD 5 Med 5
IN BI 25/50 PD 25 RI BI 25/50 PD 25
IA BI 20/40 PD 15 SC BI 25/50 PD 25 UM 25/50/25
9
KS BI 25/50 PD 25 PIP SD BI 25/50 PD 25 UM 25/50
KY BI 25/50 PD 25 TN BI 25/50 PD 15
LA BI 15/30 PD 25 TX BI 30/60 PD 25
ME BI 50/100 PD 25 Med 2 UM 50/100 UT BI 25/65 PD 15 PIP 3
MD BI 30/60 PD 15 UM 30/60/15 VT BI 25/50 PD 10 UM 50/100/10
MA BI 20/40 PD 5 UM 20/40 PIP 8 VA BI 25/50 PD 20 UM 25/50/20
10
MI BI 20/40 PD 10 PIP PPI 1000 WA BI 25/50 PD 10
MN BI 30/60 PD 10 PIP 40 UM 25/50 WV BI 25/50 PD 25 UM 25/50/25
MS BI 25/50 PD 25 WI BI 25/50 PD 10 UM 25/50
MO BI 25/50 PD 20 UM 25/50 WY BI 25/50 PD 20
5
New Hampshire does not require the purchase of insurance to meet the state’s financial responsibility law, but drivers that
purchase insurance must do so at minimum limits of $25,000/$50,000 for BI, $25,000 for PD, and $1,000 for medical
payments coverage.
6
New Jersey allows drivers to purchase a “basic policy” that only includes $5,000 of PD, $15,000 of PIP, and an optional
$10,000 for BI.
7
The New Jersey PIP benefit provides $250,000 in benefits for specified severe injuries.
https://www.state.nj.us/dobi/division_consumers/insurance/basicpolicy.shtml (last accessed Jan. 31, 2022).
8
New York requires that BI limits be at least $50,000/$100,000 for death. https://dmv.ny.gov/insurance/insurance-
requirements (last accessed January 31, 2022).
9
Kansas PIP coverage must provide $4,500 per person for medical expenses, $900 per month for 1 year for disability or loss
of income, $25 per day for in-home services, $2,000 for funeral expenses, $4,500 for rehabilitation expenses, survivor
benefits for loss of income up to $900 per month for 1 year.
10
Michigan changed its mandatory PIP medical coverage effective July 1, 2020. Previously, Michigan required PIP coverage
with no maximum limit. Now, Michigan requires the purchase of PIP coverage with a coverage limit of at least $250,000.
However, Medicaid enrollees may purchase only $50,000 in PIP coverage if other household members have an auto
insurance policy or health insurance covering accidents. A Medicare enrollee (parts A and B) may opt-out of PIP if their
household members have an auto insurance policy or health insurance covering auto accidents.
https://www.michigan.gov/documents/autoinsurance/MI_New_Auto_Ins_Law_678454_7.pdf (last accessed Jan. 31, 2022).
BILL: SB 150 Page 5
Florida’s Financial Responsibility Law
Florida’s financial responsibility law exists to ensure that the privilege of owning or operating a
motor vehicle on the public streets and highways is exercised with due consideration for others
and their property, to promote safety, and to provide financial security requirements for the
owners or operators of motor vehicles who are responsible to recompense others for injury to
person or property caused by a motor vehicle.11 The financial responsibility law requires drivers
of motor vehicles with 4 or more wheels to purchase both personal injury protection (PIP) and
property damage liability (PD) insurance.12 Florida law does not require insurance coverage for
motorcycles; however, if a motorcyclist is involved in an accident, that person’s license and
registration are subject to suspension if insurance was not purchased.
A driver in compliance with the requirement to carry PIP coverage is not required to maintain
bodily injury liability coverage, except that Florida law requires proof of ability to pay monetary
damages for bodily injury and property damage liability arising out of a motor vehicle accident
or serious traffic violation.13 The owner and operator of a motor vehicle need not demonstrate
financial responsibility, i.e., obtain BI and PD coverages, until after the accident.14 At that time,
a driver’s financial responsibility is proved by the furnishing of an active motor vehicle liability
policy. The minimum amounts of liability coverages required are $10,000 in the event of bodily
injury to, or death of, one person, $20,000 in the event of injury to, or death of, two or more
persons, and $10,000 in the event of damage to property of others, or $30,000 combined BI/PD
policy.15 The driver’s license and registration of the driver who fails to comply with the security
requirement to maintain PIP and PD insurance coverage is subject to suspension.16 A driver’s
license and registration may be reinstated by obtaining a liability policy and by paying a fee to
the Department of Highway Safety and Motor Vehicles.17
Personal injury protection (PIP) insurance compensates insureds injured in accidents regardless
of fault.18 Policyholders are indemnified by their own insurer. The intent of no-fault insurance is
to provide prompt medical treatment without regard to fault.19 This coverage also provides
policyholders with immunity from liability for economic damages up to the policy limits and
limits tort suits for non-economic damages (pain and suffering) below a specified injury
threshold.20 In contrast, under a tort liability system, the negligent party is responsible for
damages caused and an accident victim can sue the at-fault driver to recover economic and non-
economic damages. The concept of PIP insurance was developed during the 1960’s in response
to concerns that began to be voiced regarding some of the perceived shortcomings of the tort
system, in particular its ability to handle automobile accident claims in an accurate and
11
Section 324.011, F.S.
12
See ss. 324.022, F.S. and 627.733, F.S.
13
See ch. 324, F.S.
14
Section 324.011, F.S.
15
Section 324.022, F.S.
16
Section 324.0221(2), F.S.
17
Section 324.0221(3), F.S.
18
Section 627.733, F.S.
19
See s. 627.731, F.S.
20
Section 627.737, F.S.
BILL: SB 150 Page 6
expeditious fashion.21 The proposed solution was the “no-fault” system in which each driver
insures him or herself for bodily injuries caused by an auto accident, and to the extent of that
first-party coverage, tort claims based on fault would be abandoned. Florida is one of 12 no-fault
states that requires PIP coverage as part of its financial responsibility law, but the only one of
t