A bill under consideration in the Florida House of Representatives would repeal the state’s no-fault auto insurance law, a change that could significantly alter the structure of the personal auto insurance market in the state, according to a report from AM Best.
If passed, the bill would eliminate the requirement for personal injury protection (PIP) coverage as of July 1, 2026. Florida drivers would instead be required to carry bodily injury liability coverage of $25,000 per person and $50,000 per accident, while the existing $10,000 minimum for property damage liability would remain in place.
The proposal raises questions about the potential impact on insurance premiums, market participation, and litigation trends. According to a legislative analysis, the effect on the private market is uncertain and would depend on how insurers price new liability coverage requirements and respond to possible increases in legal claims.
Florida currently has the highest average annual premium for minimum required auto coverage in the country at $1,529, the analysis noted. The next four states with the highest average premiums also mandate PIP coverage.
Industry groups have warned that repealing the no-fault system could drive up insurance costs and increase litigation. Adam Shores, senior vice president of state government relations at the American Property Casualty Insurance Association (APCIA), said insurers are only beginning to stabilize their auto books after recent legal and regulatory reforms aimed at curbing excessive claims activity.
“Several major auto carriers have requested rate reductions ranging from 6% to 10.5%,” Shores said. “Repealing Florida’s no-fault auto insurance system now would undermine these gains and impose new burdens on Florida consumers.”
The APCIA also said the proposed shift could be especially burdensome for low-income drivers who may face higher premiums under a liability-based system. The concern is that some may be priced out of coverage entirely, increasing the number of uninsured motorists, the report added.
The bill allocates $83,651 from the Insurance Regulatory Trust Fund to support the Florida Office of Insurance Regulation with implementation. The agency would be responsible for overseeing the transition and managing any changes in rate filings, policy forms, and compliance issues that emerge from the shift in coverage requirements.
Florida’s no-fault system has been debated for years, with previous repeal efforts failing to clear both legislative and executive hurdles. In 2021, a similar bill passed the Legislature but was vetoed by Governor Ron DeSantis, who cited potential unintended consequences, including impacts on insurance affordability and availability.
Attempts to reach the governor’s office for comment on the current bill were not successful. The legislation is currently being reviewed by the House Judiciary Committee, according to the report.
