Florida May Say Goodbye to No-Fault Car Insurance

Since 1972, Florida has been a "no-fault" car insurance state. This means that its motorists are required to carry personal-injury-protection (PIP) insurance so that in the event that they are injured, they do not need to sue the other driver for damages. No matter whose fault an accident is, no-fault law makes it so each person's own insurance foots the bill. There are currently twelve states with no-fault laws on the books, leaving thirty-eight with traditional, at-fault insurance laws.

No-Fault Car Insurance in a Nutshell

The benefit of no-fault insurance is that fewer people involved in accidents wind up in court. Most states do allow victims to sue if damages exceed a certain level, if the act was malicious, or if any injuries sustained are permanent, and Florida follows this blueprint. But in at-fault states, far more cases wind up in court, since it is up to the courts to determine who is actually at fault if there are any disputes.

The problem with no-fault insurance is that people in no-fault states end up paying higher car insurance rates. The group, Floridians for Lower Insurance Costs says that no-fault insurance adds $500 to each driver's annual insurance bill, and few contest that no-fault policies are more expensive. One reason is that no-fault insurance invites more fraud, as cases do not come under the stricter scrutiny of the courts. But in the absence of mandatory PIP coverage, many accident victims would be unable to pay their hospital bills, ultimately resulting in bankruptcy and municipal budget shortfalls.

There Are Two Sides to Every Story

Everyone agrees that no-fault car insurance has its pros and cons. It supporters simply say that the good outweighs the bad, while its opponents insist that the opposite is true. As Florida's no-fault statute is about to expire, state legislators are holding hearings to hear from no-fault's backers and detractors. Surprisingly, the state's largest car insurance companies - Allstate and State Farm - have come out against no-fault, and are lobbying the state to let the statute expire. Trial lawyers, by contrast, are in favor of fixing the current law, which is surprising because at-fault states produce many more court cases. The truth is that the lawyers are more upset about proposed caps and mandates that would come along with a return to the at-fault system.

If you live in Florida, contact your state representative and tell him or her how you feel. If you don't have enough information on no-fault, both the good and the bad, then use carinsurancerates.com as your resource. Residents from other states would also be well advised to learn about no-fault, since many other states will be facing questions to either adopt or abandon it. The United States is a nation of, by, and for the people, and democracy extends to the realm of car insurance too!

The Democratizing of the Car Insurance Industry

But even more democratic than lobbying your elected representatives is the act of comparison shopping. The internet is often cited as a "democratizing" force, and nowhere is this more true than with car insurance. Instead of big corporations having all the power, now you, the regular consumer, are the powerful one. By shopping around, you force the corporations to give you the lowest possible car insurance rates - or risk losing you to a competitor. Getting information and shopping around are much easier thanks to the internet, and carinsurancerates.com should be your primary source for both education and comparison shopping.