Articles Posted in Insurance Law

Florida’s motor vehicle insurance laws can be hard to comprehend.

A case in point: Personal Injury Protection (PIP) and Property Damage – Liability are the only required coverages for an owner to lawfully operate a vehicle on Florida’s streets and highways. (PIP pays 80% of medical bills and 60% of lost wages for the insured up to $10,000, while Property Damage – Liability pays to repair or replace the other owner’s motor vehicle.) With these coverages, the owner is able to register a vehicle and purchase a license plate.

Surprisingly, however, in the event of a motor vehicle accident involving injury or death, having the minimum mandatory coverages will not prevent the at-fault party from having her drivers license and all vehicle registrations suspended. Sections 316.066(3)(a)1 and 324.051(2)(a) Florida Statutes.

The only type of coverage that will prevent these suspensions is Bodily Injury liability (a/k/a BI). Section 324.021 (7) Florida Statutes.
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One thing is certain, “full coverage” is not what most people think it is.

The only types of insurance coverage required by law of every owner of a motor vehicle registered in Florida are Personal Injury Protection (“PIP”) and Property Damage – Liability. Period.

There are numerous other types of coverages available under a standard Florida motor vehicle insurance policy, but none of them are mandatory like PIP and PD – Liability. Each of the coverages cost extra money, meaning that an additional premium will be charged for each. Consequently, many people forego the non-mandatory coverages.

PIP (Florida Statute 627.736) covers a combination of 80% of allowable medical charges and 60% of lost wages up to the standard policy limit of $10,000 subject to deductibles (usually $500, $1000, and $2,000), while Property Damage Liability covers vehicle damage caused by the at-fault insured. (The minimum mandatory PD – Liability policy limit is $10,000.) Neither PIP nor PD – Liability provides compensation to anyone for pain and suffering.

Only Bodily Injury – Liability (“BI”) and Uninsured/Underinsured Motorist (“UM/UIM”) (Florida Statute 627.727) compensate for pain and suffering. Neither coverage is mandatory. (Many other states make BI mandatory. For years, consumer advocates have tried to make BI mandatory in Florida, but the insurance industry has fought off the efforts. The members of our law firm believe that if any coverage should be mandatory, it should be BI.)
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Florida Statutes section 627.733, entitled Required Security, requires all motor vehicle owners to maintain “no-fault” automobile insurance covering, among other items, 80% of the insured’s own medical expenses. See §§ 627.733(1), (3)(a), 627.736(1)(a). The typical Florida PIP policy has a $10,000 coverage limit with deductibles of up to $2,000.

From a fair reading of the statutes it seems that every vehicle owner who procures the mandatory no-fault coverage is exempted from tort liability for 80% of medical expenses and 60% of lost wages up to the PIP policy limit (typically $10,000).

However, what happens when the fault-free party fails to maintain the required PIP coverage? In other words, the non-negligent party is in violation of the law by failing to maintain PIP.

Until the Florida Supreme Court rules on the issue, the answer depends on where in Florida the accident happens.

Florida’s civil court system is divided into county courts, circuit courts, district courts of appeal, and the Florida Supreme Court. The county and circuit courts are the only trial courts within the system, while the DCAs and the Florida Supreme Court are dedicated appellate courts.
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Florida Statute 627.409 (2010) allows an insurance company to rescind an insurance policy on the grounds of misrepresentation if it can prove:

a) The misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

However, in Casamassina v. US Life Ins. Co., 958 So. 2d 1093 (4th DCA 2007), the insurance carrier was prevented from using the statute to rescind the policy by language in its own insurance application.

United States Life Insurance Company issued a $500,000 life insurance policy to John Casamassina on November 6, 1997. Less than two weeks later, Casamassina was diagnosed with a brain tumor; he died on December 4, 1997. After U.S. Life denied the policy claim, the trust beneficiary of the policy and the widow filed suit.
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