Florida Governor DeSantis Vetoes SB-54 Stopping the Repeal of Florida’s PIP System

SB-54, which cleared the Florida Legislature in April 2021, and would have repealed Florida’s PIP Scheme, was vetoed by Florida Governor, Ron DeSantis, Wednesday. In his letter to the Secretary of State, Gov. DeSantis acknowledged “the PIP system has flaws,” but that “SB 54 does not adequately address the current issues facing Florida drivers,” adding the bill could have consequences the legislature had not fully considered, including “negatively impact[ing] both the market and consumers.” SB-54, in eliminating Florida’s No-Fault Act, would have required Florida drivers to carry $25,000.00 in bodily injury coverage for the injury or death of one person in a crash and $50,000.00 for two or more people; in addition to changes to Florida’s bad faith laws. Additionally, the bill removed the requirement that an injured motorist be required to prove they sustained a permanent injury in order to recover future medical damages, or pain and suffering.

The veto comes as a relief to some insurers and consumer advocacy groups, who argued the bill would have increased premiums and the overall cost of healthcare. In its current state, the No-Fault Act requires all Florida drivers to carry $10,000.00 in PIP coverage to help pay for medical costs for motorists, passengers and pedestrians injured in accidents – regardless of fault.  Initially implemented in 1979, with its most recent iteration in 2012, the No-Fault Act’s goal has been to streamline access to the medical treatment and payment for said treatment, while reducing the need for court intervention to determine fault. What has resulted is that Florida is above average, by nearly double, for average charge per provider and average procedures per claim. The Court system is clogged with cases fighting over fee schedule reductions, allegedly improper exhaustion, pennies owed on interest, coverage, etc. Florida has also seen skyrocketing fraud with regards to PIP reimbursements, with improper requests for reimbursement for treatment either never provided or that which was not medically necessary. For many defense attorneys, the driving force behind many PIP suits is the No-Fault Act’s attorney fee provision, all but guaranteeing that any case filed by a provider will result in thousands of dollars in fees and costs being awarded to the provider’s attorney, with no avenue to recover same on the part of an insurer. Plaintiff’s firms routinely file lawsuits without basis, only to be subsequently dismissed without any fees being awarded to the insurer for having to defend same.

The Legislature, the Governor, and many attorneys in the State will agree, the current PIP system needs an over-haul; but SB-54 was not the answer. The bill sparked fierce debate between insurance company, consumer advocacy groups, as well as the Defense and Plaintiff’s bar – it would have changed the game. The loudest arguments against SB-54 was the idea the bill would have increased premiums and increased lawsuits by removing the requirement that a permanent injury be proven and providing a guaranteed pot-of-cash to grab from. Proponents argued it would have decreased overall fraud and brought down insurance premiums. The bill was all too quickly passed by the Legislature, with several Legislatures reporting independent study or analysis of the financial impact were not conducted. Despite the veto, one thing is clear, we have not seen the last of the attempt to rid the State of PIP. Additional attempts to repeal the No-Fault Act are expected to be presented at the next Legislative session, as have been at nearly all prior sessions since PIP’s implementation.

In addition to repealing PIP, SB-54 aimed its sights at an attempt to reform bad faith, uninsured motorists claims, as well as repealing the requirement that insurers be required to repair/replace damaged windshields without being able to implement a deductible scheme in their policies.