No-Fault Vs. At-Fault: Their Pros And Cons
Michael Babboni
Insurance Coverage
Last April, the Senate passed SB 54, a bill that aims to abolish personal insurance protection (PIP) insurance in Florida. This law, had it been signed by Governor De Santis, would have been in effect in January 2022, and changed Florida from a no-fault state to an at-fault state.People were divided over SB 54, with some saying it will make insurance more expensive, while others are saying it will eradicate PIP fraud. It is unlikely that this will be the last Florida will hear of attempts to abolish PIP insurance. So, let us consider the pros and cons of no-fault systems and at-fault systems.
The No-Fault System
Florida, much like most no-fault states, adopted the no-fault system in the 1970s. Currently, 12 states plus Puerto Rico operate under the no-fault system. In these states, each driver is required to carry personal injury protection insurance—a minimum of $10,000 in Florida—which will cover the policyholder’s (and their passengers’) medical expenses, lost wages, as well as funeral and burial costs even before fault is declared or regardless of who caused the accident. As long as the policyholder did not cause the accident 100%, their PIP insurance will cover their expenses after the accident.
Furthermore, they are not automatically liable for the other party’s injuries. At-fault drivers are only held liable when the other party’s injury is severe and their medical costs exceed the amount covered by their PIP insurance. In this case, the victim may sue the other party with assistance from an auto accident lawyer, after which the court shall decide how much they will be compensated.
Pros And Cons Of No-Fault Systems
The no-fault system was adopted because it offered benefits for people, such as:
• Motorists with PIP insurance are sure that they are covered by their own policy in case they get into an accident with an underinsured or uninsured driver.
• Allows flexibility in terms of the amount of coverage to carry, as long as it meets the minimum requirement.
• Easier and faster claims filing and settlement since motorists don’t have to wait for the court’s decision on who is at fault before getting their benefits.
Governor De Santis himself, in his veto letter, acknowledged that the no-fault system is flawed. Here are its main disadvantages:
• Doesn’t hold reckless drivers financially liable for their actions.
• An accident can drive up even the victim’s premiums, not just the at-fault individual’s premium.
• PIP insurance has limited scope. It does not cover property damage and damages if you were involved in an accident while working. This means that motorists need other types of insurance like bodily injury insurance and property damage liability insurance.
The At-Fault System
In an at-fault state, the driver that caused the accident is held liable for all the damages resulting in the accident. The state is the one that determines who is at fault in a car accident, as well as how much the victim should receive as compensation.
Pros And Cons Of At-Fault Systems
Here are the benefits of an at-fault system:
• The system holds reckless drivers liable for damages and injuries they caused.
• Other drivers’ premiums will not increase if they are not at fault for the accident.
Here are some advantages of an at-fault system:
• Almost always requires the court to determine who is at fault and to coerce the at-fault party and their insurance company to pay the victim. This process takes time.
• The compensation the victim gets is dependent on the at-fault motorist’s insurance coverage and/or financial abilities. One risk is that the victim cannot be fully compensated if the at-fault motorist is uninsured or underinsured.
The Future Of Auto Insurance In Florida
Although Florida’s no-fault system will remain the same for now, Floridians can expect that change will be just around the corner as lawmakers will surely continue to find ways to improve the system.
Getting into a car accident is not easy whether the state follows the no-fault or at-fault system. Consult with a St. Petersburg car accident lawyer to help you navigate the system and ensure that you get the right compensation for your injuries and damages.