Update 3/10/2018 – Both CS/SB 150: Motor Vehicle Insurance and CS/HB 19: Motor Vehicle Insurance have been indefinitely postponed and withdrawn from consideration.
Many of you may be aware, most of you probably aren’t aware, that our State Congress is in session. The House of Representatives and the Senate are both in Tallahassee. We’re about halfway through this year’s session, and a lot of things are on the table. Some of those things might affect you and your family, and they certainly affect our business, so I thought I might bring a couple of those things to your attention today if you’re interested, which I hope you are.
Car Insurance In Florida
A lot of people know that we have a no-fault state. Not many people really understand that completely until they’ve had an accident and they’re forced to pull out their insurance policy and look at it. But in this state, in our state Florida, we do not have some forms of insurance and we do not have a requirement for some forms of insurance that most other states do have.
Now you may think, “Well, I’ve got full coverage” because that’s what your agent has told you or that’s what they said online. That what they described it as is “full coverage”.
Mandatory Personal Injury Protection
But in Florida we have personal insurance protection (PIP) which is mandatory and that’s your no-fault coverage, and it provides something very important that’s about to go away possibly as quickly as next week.
Many of you know that you have your personal injury policy, a $10,000 policy that pays medical bills that are incurred as a result of injuries you sustained in a car accident. Now that works both ways.
PIP coverage works both for the purpose of protecting the person that caused the accident and protecting those that didn’t cause the accident. (Click to Tweet)
So imagine you and I get into a car accident. I have my PIP, you have your PIP. Your PIP covers your injuries, my PIP covers my injuries.
Now to some that does not make good sense, right? If you caused the accident, why should my insurance have to pay anything? Or if I caused the accident, why should your insurance have to pay anything?
But the good news is is that regardless of fault, there’s that term no-fault, right? Regardless of fault, we each have $10,000 in personal injury protection to use to treat our injuries. So if we get in an ambulance and we go to the emergency room, then we get checked out, those bills are covered by our car insurance, our PIP, regardless of fault.
New Bills Propose Different Insurance Requirements
Well, that’s on the verge of changing, and this is a pretty big change in Florida because it hasn’t been this way ever before, where the State Legislature and the State Senate each have a bill working its way through the process. They’re not identical, and I’ll talk about that in a moment, but both of these bills for the first time, at least in my lifetime and as far as I know ever in Florida, there’s going to be a requirement for bodily injury coverage.
Now that’s a different kind of coverage. We haven’t talked about that yet. You can buy it now, but it’s optional, and that bodily injury coverage that you might have on your policy protects you in the event that you hurt someone else, and that someone else has a claim for damages back against you for causing the accident. Totally different purpose. Totally different application than PIP. Totally different animal.
For the first time in Florida, if this state bill passes, Floridians will be required to carry bodily injury coverage. Now if you were to ask me, “Hey Marcus, what do you think about that?” I’m glad you asked.
What I think is that mandatory BI is a good thing in Florida. It exists in I believe every state in the union but one. I want to say that’s New Hampshire but I won’t swear to that, but every state but one requires bodily injury coverage. We’re on the verge of passing a bill that requires Floridians to do that.
Now what that does, on the other hand, is it does away with PIP. So let’s back to that scenario where you and I had an accident.
Under our current law, it doesn’t matter whether I’m at fault, doesn’t matter whether you’re at fault. You’ve got $10,000 in coverage.
But, if the bills that are currently in Tallahassee working their way through the system pass, and if PIP goes away, and you and I get into an accident, if I caused the accident, I don’t have any coverage for my injuries. I do have coverage if I hurt you, and you have a claim for injuries and you have medical bills.
I now have bodily injury coverage that I can tender to you to take care of that, but I don’t have any coverage to take care of my injuries.
Differences Between The Two Bills – Bodily Injury Coverage & Medical Payments Coverage
So right now in a no-fault system, anybody that’s in an accident, whether they caused the accident or someone else caused the accident, has $10,000 in PIP. That’s on the verge of going away.
Now the amounts of bodily injury that are going to be required under the bills are different in the State and the Senate. There’s another kind of insurance that’s being talked about in the Senate’s version of their bill. It’s called medical payments coverage. It’s kind of like a Super PIP, it’s an addition to your PIP. Usually, it’s sold in increments of $5,000 or $10,000, so you may or may not have this extra coverage on your policy.
But the Senate version of the bill has a $5,000 mandatory med-pay provision which would cover the emergency room bills. It’s basically to protect the hospitals from all the people that might get injured and don’t have PIP anymore to pay for their healthcare.
So I know that’s a mouthful. There will be a quiz next week on this so make sure you study up. But no, in all seriousness, excuse me, in all seriousness, very important that if you care one way or the other about this, now is the time to call your State Representative or State Senator and say, “Hey, I do not agree with abolishing PIP” or “Hey, I do agree with abolishing PIP as long as there’s a mandatory BI provision.”
Look, insurance is expensive, and you buy it hoping you never need it. But if you do need it, you’ve got to have the right kind of insurance in place to protect not only you but your family.
So if I’ve lost you in this, it’s my fault. I didn’t do a good job of explaining it, then call me up and make me explain to you individually. If you’ve got a question about how PIP works or if you’ve got a question about how the Senate or the State bill looks and what changes it’s going to make, give me a call. I’ll be glad to explain it in greater detail for you.
It’s tricky, but now’s the time to pay attention because these laws are on the verge of changing, and we as citizens have a vote in that.
Pick up the phone or you fax a message to your State Representative saying, “Hey, I don’t like this PIP bill” or “I don’t like this mandatory BI bill” or “I do like the PIP bill” or “I do like the mandatory BI.” Now’s the time to make a difference in the way your State Legislature works. So give me a call. I’m Marcus Michles. Thank you for watching Michles & Booth’s video blog this week. We’ll see you again next week.