- Florida is one of the 12 states in the country that has some kind of no-fault insurance system in place
- Florida’s system is called a modified no-fault system because the injured party has the right to sue in some cases
- There are currently no states in the United States with a pure no-fault system disallowing any type of lawsuits
- Since no-fault insurance is mandatory in Florida, you’re required to carry Personal Injury Protection
- In addition to no-fault coverage, you’ll have to carry at least $10,000 of Property Damage Liability coverage
If you hear the words “no-fault” used when referring to auto insurance, it might sound contradictory. One of the first things that claim professionals do when assigned a claim is investigate it.
The entire purpose of the investigation is to allocate fault, so it sounds odd when you learn that there are states with no-fault insurance systems.
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If you live in Florida, you’ll have to learn more about no-fault systems being that it’s a no-fault state. Since there are only 12 states scattered throughout the country that has different versions of no-fault systems, the subject might intimidate you.
Here’s a guide that helps you understand what Florida no-fault car insurance is all about:
What is no-fault car insurance?
There are different types of auto insurance systems that states can operate under. Some states have no-fault auto insurance systems and others have fault-based systems.
The fault is allocated in both types of states after an auto accident claim is filed. The main difference between no-fault and fault-based systems is that policyholders recover financial losses from their own insurer.
– What is tort?
If you’ve lived in a state with a fault-based insurance system in the past, you probably heard the term “tort” quite a bit. Tort is a term that’s used in conjunction with fault. The term itself is defined as a wrongful or negligent act that leads to a legal liability.
Most states run a tort system. When a driver is declared the negligent party whose actions led to an accident, they will be legally liable for paying for damages.
The tort system is why drivers in tort states must carry Bodily Injury Liability coverage that pays for third-party medical treatments. Victims are even able to collect for pain and suffering.
– What is no-fault?
No-fault is a special provision that’s set forth by the state legislature stating that insurance companies must sell first-party coverage to their policyholders and pay for their own client’s medical bills regardless of who is eventually declared at-fault for the accident.
In states with no-fault systems, the victim who is injured in a loss is limited in their right to sue. There are currently only 12 states that operate under some sort of no-fault law, but none of the provisions that are in place are classified as pure no-fault systems.
All no-fault states have modified plans, add-on plans, or choice plans but not pure no-fault systems.
Is Florida a no-fault state?
There are 12 no-fault states and Florida is one of them. Out of those 12 states, nine of them operate under a modified no-fault system where claimants can only sue negligent drivers after a threshold is exceeded.
Florida is one of the nine states with a modified system in place that limits your right to sue but doesn’t disallow it entirely.
Many drivers assume that since Florida is officially a no-fault state that they can’t be sued for injuries in an accident that they cause. While the provision can be confusing, you aren’t shielded from lawsuits just because every driver has their own medical and lost income coverage.
The injured driver does still have the option to file suit against you once you’re declared negligent to collect for costs associated with the accident.
– The Advantages of the Florida No-Fault System
One of the main advantages of Florida’s no-fault system is that you don’t have to worry about waiting for fault allocation to file a claim and seek medical treatment. Since you request payment from your own insurer, you know exactly how much protection you have from the start.
In no-fault states, you have control over the limits that you carry under your Personal Injury Protection and even receive coverage for loss of income and other services you might need while you recover.
If the damages exceed a threshold, there’s always an opportunity to collect from the liable party.
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– The Drawbacks of the Florida No-fault System
The purpose of Florida’s no-fault system initially was to help reduce the reliance on the court system to settle car accident claims. Since not everyone can take a driver to court, it does lead to fewer lawsuits but that reduction in lawsuits comes at a cost.
One of the major drawbacks of the no-fault system in Florida is that premiums are generally more expensive.
The law itself has taken on the nickname of bad-faith law because medical providers inflate medical expenses because they are aware that the insurer will pay for the treatment within 30 days.
There are no delays like there is in tort states, which is why there are new proposals to do away with Florida’s no-fault system.
Auto Insurance in Florida
The coverage requirements in tort states are different from the coverage requirements in no-fault systems. Since you have to carry your own no-fault coverage to claim against, you must have Personal Injury Protection.
You’re also required to carry Property Damage Liability to pay for third-party property repairs. Here’s a breakdown of the minimum limits that you can carry:
- Personal Injury Protection – $10,000 per person
- Property Damage Liability – $10,000 per occurrence
– Additional Coverage Options
The state can only verify whether or not you’re carrying PIP and PD. If you have these coverage options, you’re in compliance. Any other coverage is considered additional and optional. Here are some of the additional forms of coverage that you can add:
- Comprehensive – Pays for repairs needed to your car after it’s stolen, vandalized, or damaged in a storm
- Collision – Pays for repairs needed when your car is damaged in an at-fault accident or hit-and-run accident
- Uninsured Motorist – Pays for your medical bills that exceed your PIP if someone without insurance hits you
– Penalties for No Insurance
All insurance companies are required to notify the state when your auto insurance lapses. This notification is sent to the DMV real-time.
If you can’t prove that you have insurance elsewhere, your plates will be suspended. You’ll have to pay a reinstatement fee of $150 to get your plates activated no matter how short the lapse was.
The reinstatement fee goes up to $500 for habitual offenders. You may even be cited and fined more for driving without insurance. This could be between $500 and $5000 depending on your history. Some drivers are even sentenced to up to 12 months in jail for failing to obey the law.
Finding the Best Car Insurance Coverage in Florida
You need to find the best car insurance regardless of the type of insurance that’s required in your state. If you’re looking for affordable no-fault coverage in Florida, it’s crucial that you shop around to compare rates from multiple carriers.
– Shopping Around
Doing a thorough comparison every six months is the only way to be confident that you’re getting a good deal. Some companies have better rates than others because of the market that they are targeting. If you get a handful of rate quotes, you will have more power as a consumer.
– Review Each Company’s Health
Price is important but not quite as important as the company’s health providing the coverage. Each company that gives you a rate quote should be financially strong and able to pay for PIP and PD claims.
One way that you can verify that a licensed Florida insurer has a strong financial backing is to look at financial ratings through:
After you have narrowed down the options by referencing rating data, you can begin to look at consumer reviews by referencing satisfaction reports through organizations like J.D. Power and Consumer Report.
These companies use real consumer data to rate carriers based on survey responses. The information that is included in the report can be valuable.
At the end of the day, the best way to find a deal on your Florida no-fault premiums is to shop around and ask for discounts. If you don’t have much time to compare premiums, use an online rate quote tool and see how much mandatory coverage will cost you from all of the larger carriers.
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