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Why Car Insurance May Go Up With Florida No-Fault Law

Jan 18, 2024

Individuals in Florida are bracing for a potentially significant increase in their car insurance premiums thanks to the impact of the state’s changes in the no-fault law for car insurance.

Originally, Florida moved to the no-fault law in the 1970s, along with many other states. In 2007, the legislature changed the law but then almost immediately put it back on the books. Senate Bill 54 again attempted to repeal the law, but Florida Governor Ron DeSantis vetoed it on June 29, 2021. Efforts are again underway to address the problems the no-fault law causes insurance companies in the state.

Understanding why and how no-fault insurance drives up car insurance in Florida is helpful for consumers. Our agents at Del Toro Insurance provide information and education about car insurance for our customers while also helping them to find the most affordable and complete car insurance based on their driving needs.

The Problem with Fraud and Excessive Litigation

Two of the biggest issues driving the increasing costs of car insurance in Florida are fraud and excessive litigation. Fraud is largely in the form of staged accidents, also known as “swoop and squat” accidents.

Typically, these accidents involve two people in separate cars. One car cuts in front of an innocent driver and brakes suddenly and without warning. The second car pulls out and drives beside the innocent driver, preventing them from changing lanes. The innocent driver cannot avoid hitting the car in front, allowing that driver to make a claim. Since there is no investigation in a no-fault insurance state, the insurance company must pay out up to the $10,000 cap. These staged accidents also include using unscrupulous medical care professionals to generate the necessary medical documentation for the claim.

Additionally, despite the belief that no-fault car insurance would decrease litigation, claims in Florida are more likely to involve an attorney than anywhere else in the country. These attorneys strive for maximum compensation for the individual, resulting in higher payouts for every Florida insurance company.

Together, these two factors are increasing car insurance premium levels for all drivers across the state.

The Impact of the $10,000 Cap

The limit on PIP coverage payments is $10,000. This number does not reflect the current costs of medical services, even for minor injuries related to a car accident. This leaves individuals who are injured and have medical bills and other related expenses exceeding $10,000 with no option but to sue the at-fault driver.

Alternative Options to No-fault Insurance

Repealing no-fault insurance in Florida will only bring about lower premiums and decreased fraud if it addresses the flaws of the current law.

Many people argue that changing the PIP cap to a more realistic and current level of liability coverage of $25,000 per person or $50,000 per accident. This would reduce the litigation rates while allowing for streamlined claims processing.

Reducing fraud by tracking medical clinics and providers and looking for patterns of insurance claim documentation is one way to help manage this growing problem. With a focus on PIP clinics throughout the state and shutting down unlicensed clinics, there is less likelihood of disreputable reporting. Other options, such as capping attorney fees on PIP cases, would also help to rein in the high levels of litigation by fraudsters and unscrupulous attorneys looking for a large award settlement.

Del Toro Insurance provides car insurance information and education for all our customers in Hialeah Gardens, Margate, Homestead, Palmetto Bay, Cutler Bay, Hialeah Gardens, North Miami Beach, Coral Gables, Hialeah, Naples, and Miami, Florida. To reach one of our agents, drop by our offices or call us today at 305-335-8676.


What is Florida’s no-fault insurance system?

Under Florida law, policyholders in vehicle accidents make a no-fault claim to their insurance provider and receive up to $10,000 in medical bills and other qualifying expenses.

What are the main factors contributing to the high cost of Florida’s no-fault insurance system?

Two significant factors are increasing cases of fraud and higher rates of litigation.

How could repealing Florida’s no-fault insurance system affect car insurance rates?

Potentially, car insurance rates could rise with a repeal of no-fault insurance. This would be most significant for those with minimum vehicle coverage.

What are some potential solutions or reforms to address the high cost of no-fault insurance?

Increased monitoring of fraud claims by PIP clinics and providers and increasing the PIP coverage levels to more accurately reflect current medical costs.

How can I protect myself from rising car insurance costs in Florida?

Talk to the agents at Del Toro Insurance to review your coverage and compare car insurance policy options.

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