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Governor Vetoes PIP Repeal Bill

Governor Vetoes PIP Repeal Bill

Governor Ron DeSantis ended weeks of speculation, persuasion and publicity campaigns when he vetoed SB 54, which would have repealed Florida’s Personal Injury Protection (PIP) law.  SB would have replaced the no-fault PIP system with certain mandatory bodily injury (BI) coverage.

The potential repeal of PIP has been an annual topic in the legislature for several years, signaling problems with the current system.  However, the Governor’s veto of the mandatory BI replacement shows that finding a viable alternative to the flawed PIP system likewise is challenging.

Proponents of PIP repeal argue that it is subject to significant fraud, which can be reduced in another system thereby lowering rates.  In addition, supporters of repeal point out that most drivers already have bodily injury protection limits exceeding the bill’s requirements.  They further contend that the $10,000 PIP limit is outdated and doesn’t provide meaningful protection.

Opponents of PIP repeal have said the reforms will lead to prices increases, especially among lower-income drivers who carry low limits.  They further contend that more drivers will be uninsured rather than meet the new minimums.  Opponents also suggest that any auto insurance reform package that does not address abuses with bad faith litigation will not achieve the intended benefits for consumers.  The opponents’ positions recently were aided by a study commissioned by the Florida Office of Insurance Regulation showing elimination of the no-fault PIP system could result in an average $202 increase in premiums for Florida drivers. Policyholders currently maintaining low limits likely would see increases higher than the average

In his veto letter, Governor DeSantis acknowledged the PIP system is “flawed” and called Florida’s bad faith laws “deficient.”  The Governor went on to say SB 54 does not adequately address these concerns and might have unintended consequences that negatively impact both consumers and the auto insurance market.