Insurance Blog

Florida Drives Toward Repeal of Motor Vehicle No-Fault Law


By Amy O'Connor | April 20, 2021


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After many years of trying, Florida is closer than ever to repealing its 50-year-old motor vehicle no-fault law.

However, many industry stakeholders have expressed opposition to the legislation passed by the Florida Senate last week and its companion bill approved by the House Judiciary Committee Monday, saying the proposals will actually raise rates for many Florida drivers and be ineffective at weeding out fraud.

Florida’s current no fault law requires drivers to carry personal injury protection coverage of $10,000. If passed, the new law would instead require that drivers carry bodily injury liability coverage with limits starting at $25,000 per person.

Senate Bill 54 and House Bill 719 would also create a new framework to govern motor vehicle claims handling and third-party bad faith failure to settle actions against motor vehicle insurance carriers. The bills also require policies include a medical payments option of $5,000, though under the House version insureds can opt out of purchasing the coverage.

SB 54’s minimum liability requirements for motor vehicle ownership or operation include:

  • For bodily injury (BI) or death of one person in any one crash, $25,000, and, subject to that limit for one person, $50,000 for BI or death of two or more people in any one crash.

  • Retaining the existing $10,000 financial responsibility requirement for property damage.

  • Eliminating the limitations on recovering pain and suffering damages from PIP insurers, which currently require bodily injury that causes death or significant and permanent injury.

Insurers may also offer medical payments coverage with limits of $10,000, without a deductible, to cover medical expenses of the insured. Insurers can offer other policy limits that exceed $5,000 and may offer deductibles of up to $500. SB 54 requires that insurers must reserve the first $5,000 of MedPay benefits for 30 days to pay providers of emergency services or hospital inpatient care.

The exclusion of a specifically named individual from specified insurance coverages under a private passenger motor vehicle policy, with the written consent of the policyholder, is also authorized under the bill.

“Florida is one of only two states in the country that does not currently require drivers to carry liability coverage that would immediately kick in if they cause harm to another person while operating a motor vehicle,” said Senate President Wilton Simpson in a statement. “For everyone’s protection, drivers must be insured at sufficient levels. PIP coverage levels are clearly insufficient. It’s the right time for Florida to move to mandatory coverage for bodily injury liability.”

Included in the Senate version of the bill and added Monday to the House version is the creation of a new framework for motor vehicle insurance bad faith actions. The bill requires insurers to follow claims handling best practices standards based on “long-established good faith duties related to claims handling, claim investigations, defense of the insured and settlement negotiations,” a Senate statement said.

But industry groups say the proposed bad faith reforms will not reduce lawsuits, which is a primary driver of costs for the state’s insurers.

“Meaningful reforms to Florida’s deeply unfair bad faith system should be included to help reduce lawsuits,” said Michael Carlson, president and CEO of the Personal Insurance Federation of Florida. “While the Senate bill includes an attempt at bad faith reform, it has been weakened by the trial bar to the point that it may not help reduce lawsuits.”

The American Property Casualty Insurance Association’s (APCIA) Assistant Vice President of State Government Relations Logan McFaddin said the proposals lack “any meaningful reforms to Florida’s bad faith laws, which will only serve to fuel the current cycle of lawsuit abuse, worsen Florida’s legal environment, and could lead to even higher costs for consumers.”

Specifically, McFaddin said HB 719 is a “considerable step backward and [will] do nothing to alleviate the current abuses of Florida’s bad faith laws.”

PIFF and APCIA said the passage of the proposed PIP repeals would likely raise costs for Florida drivers, particularly those who buy the minimum required insurance or who currently buy bodily injury coverage at amounts below what the proposed law requires.

Florida’s uninsured motorist rate would likely increase from its current 20%, the groups said, as more low-income and underinsured drivers will be unable to purchase higher amounts of coverage. Florida drivers currently pay the highest premiums in the nation, according to MarketWatch data.

“In Florida, approximately 40% of drivers carry minimum limits that are below what would be required under SB 54. Under the current proposal, these drivers could see their auto insurance costs rise by $165 to as much as $876 a year,” said McFaddin.

“Florida cannot afford the higher insurance rates generated by HB 719 and SB 54,” Carlson said.

Senator Jeff Brandes was the lone vote in the Senate against SB 54. Brandes supported a previous version that did not include a mandatory MedPay option, and said there was insufficient time to gather data on if the amended bill would lower rates for Florida drivers. Brandes voiced concern the new version would increase the number of uninsured drivers in the state and harm low-income policyholders.

“We have no basis for making claims that rates will go down,” he said. “Twenty percent of Floridians are driving around without auto insurance and if we raise prices, more Floridians will drive around without insurance – that is a huge problem for me.”

APCIA’s McFaddin said lawmakers are attempting to eliminate the major public policy “through a rushed process without an objective study on the cost impact to consumers.”

However, Senator Danny Burgess, SB 54 sponsor, asserted his bill would eliminate fraud in the system that would lower costs and would offer an overall reduction in rates. The bill, he said, is trying to right a “very broken system.”

“The goal of this legislation is to lower the number of uninsured and underinsured drivers and provide a greater safety net in the event of an accident. Replacing our current no-fault system with a bodily injury liability system more appropriately places liability where it should be – with the party that caused the accident,” said Burgess.

He added the new framework for handling bad faith litigation, “will lead to better outcomes for both insured Floridians and their insurance companies.”

A report from the Office of Insurance Regulation in February noted that overall loss trends for automobile insurance losses in Florida are continuing to increase for the most significant coverages such as BI liability, PIP, and comprehensive coverage. The increases are a result of cost drivers such as a higher rate of fatal crashes in Florida than the rest of the country, higher loss trends for BI and PIP, and the costs of services associated with auto insurance such as medical care, hospital care and motor vehicle body work.

“These trends in auto insurance rates will likely continue, regardless of whether PIP remains or is replaced by BI,” the report stated. “If PIP is repealed and replaced with mandatory BI and MedPay, without addressing bad faith and litigation trends, increased litigation and claims costs associated with the new mandatory coverages could increase premiums dramatically.”

HB 719 now goes to the full House for a vote. If passed and signed by the governor, the new system would take effect Jan. 1, 2022.


What are living benefits of life insurance?


While life insurance generally benefits your loved ones after you pass away, it can also benefit them (and you) before that time comes through something known as living benefits. 


Term Life Living Benefits

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Term life insurance covers you for a set amount of time, or term. It provides funds to your beneficiary (or beneficiaries) if you pass away during that time.

Living benefit options for term life include:

  • Accelerated death benefits. This living benefit pays out a portion of your term life policy if you ever face a terminal illness. This gives you needed cash to cover medical expenses, debt and more. Many people also use the funds to take a dream vacation or make other memories with their loved ones. Here are four things in mind when it comes to this living benefit:

    • Different insurers have different life expectancy timelines for when you can access the cash.

    • The policy may need to be in force for a certain amount of time before you can access the living benefit.

    • You may be charged interest on the portion of the accelerated death benefit that you use.

    • The advanced amount is typically subtracted from the total amount your beneficiaries receive after you pass away.

  • A variation on this option is called a “critical illness rider” that lets you access your death benefit if you’re afflicted by a specific ailment or disease.

  • Return of premium. With this living benefit, all the premiums you paid during the term are returned to you so long as you don’t pass away during the term. You typically pay more for this kind of policy than you would for a traditional term life policy.

  • Disability waiver of premium. This living benefit lets you skip your premium payments in the event you suffer from a long-term disability for six months or more. While not a true cash benefit, it nonetheless is a valuable option to have since there’s a three in 10 chance you’ll face a disability that keeps you out of work for 90 days or longer at some point during your working career.

Permanent Life Living Benefits

Permanent life insurance has a death benefit like term life insurance, along with the ability to accumulate cash value on a tax-deferred basis, which a term policy does not.

Some permanent life insurance policies give you the option of accelerated death benefits like term life insurance does.

Permanent life insurance lets you tap into needed funds throughout your lifetime in four other important ways as well:


  • Cash value withdrawal. A withdrawal lets you access a portion of the cash value of your permanent life policy. You won’t owe any taxes on this withdrawal if the amount you withdraw is less than or equal to your premium payments. However, you will owe taxes if any portion of the amount you withdraw is from interest, dividends or capital gains. Also be aware that the amount you withdraw will be subtracted from the policy’s death benefit if it’s not repaid.

  • Policy loan. You’ll be charged interest if you take out a loan against your permanent life policy, but it’s usually lower than the interest charged by other lenders. You also won’t have to undergo a credit check or abide by a long list of restrictions.

  • Policy surrender. A policy surrender is when you cancel your permanent life policy to access the cash value portion as a one-time lump sum. The insurer will give you that amount, less any outstanding loans and/or unpaid premiums.

  • Long-term care benefits. Adding a long-term care benefit to your permanent life policy lets you tap into the death benefit to cover long-term care expenses that your health insurance doesn’t cover. The death benefit is typically reduced by the amount of the long-term benefit that you use. It’s a valuable living benefit to have when you consider that 70 percent of people turning 65 today will need some form of long-term care in their lives.


The Florida housing market is booming. Is a crash ahead?

April 14, 2021

Check out this informative article regarding the 2021 housing market from:

The Florida housing market is booming. Is a crash ahead?

The market’s sustained, gravity-defying bounce-back — while much of the rest of the economy remains in a pandemic recession — has caused some to question whether it’s headed for another bust. Despite the rapid sales, the current boom still does not bear many similarities to the lead-up to crisis in 2007, because there isn’t the same proliferation of risky mortgages. From a statistics standpoint, it’s not hard to find some comparisons between the current market and the pre-Great Recession bubble. [Source: Tampa Bay Times]

Floridians could get tax break to elevate homes under new proposals

Floridians would be asked to approve a tax break for people who elevate their homes to avoid the threat of flooding, while up to $100 million a year would be set aside to help local governments combat rising sea levels, under proposals announced Friday by House Speaker Chris Sprowls, R-Palm Harbor. The measures are filed for the legislative session that begins Tuesday and come after Gov. Ron DeSantis proposed providing $1 billion over the next four years to state and local agencies for “resiliency” projects to help combat the effects of climate change. [Source: News Service of Florida]

Column: Snowbirds are morphing into sunbirds

In a fundamental shift, sunbirds are increasingly those who were former snowbirds but elected to flip their migration pattern. They are moving to our area from all over the country, and increasingly they are electing to purchase a primary residence rather than a second home or seasonal rental. Domiciling in Florida has existed as a means of reducing tax liabilities for decades, and the infamous 183 days is a well-known threshold. Yet the more recent explosion of sunbirds is driven by lifestyle choice, with the desire to enjoy all the benefits of living in our market most of the year and only venturing up north during the heat of summer. [Source: Sarasota Herald-Tribune]

How the real estate game has changed

Over the last 30 years, real estate brokerage has changed in many respects. Perhaps the most significant change is how buyers and sellers obtain information about the real estate market and the value of homes. Today, it's all about the internet. About 25 years ago, pre-Google, buyers and sellers worked with agents who printed black-and-white listing books once or twice a month. Agents were the gatekeepers of all real estate knowledge, and that made the process unfair and unfriendly (sometimes to the point of hostile) for some. [Source: Sarasota Herald-Tribune]

It’s getting more expensive to rent in most parts of South Florida as demand soars

Renting a home or apartment in South Florida is getting more expensive — in some neighborhoods more than 10% higher than a year ago — as the real estate market is flooded with people relocating from out of state. After falling in the early months of the COVID-19 pandemic, average rents have been going up steadily recently and outpacing the national average. The trend mirrors the increase in home prices that’s being driven by low interest rates and high demand. [Source: South Florida Sun-Sentinel]