Specialty Agents Association Op-Ed

Pat Lorello, Vice President of Marketing, North Florida for Seminole Casualty Insurance Company and Bud Stumbaugh, President and CEO of AA Holdings, LLC wrote the editorial opinion piece below. 

A PDF version of the document is also attached for your convenience.

Should you have any comments or questions, please do not hesitate to contact this office.

 

IS THIS THE END OF MANDATORY AUTO INSURANCE IN FLORIDA?

An Editorial Submission from the Specialty Agents Association of Florida

The sunset of the Florida No Fault Insurance Law will occur on September 30, 2007. Automobile insurance (as we have known it for the past twenty years) will change for all Floridians who own and operator a motor vehicle. In fact, for all intents and purposes, there will be no mandate for automobile insurance at all. Floridians will join only three other states who have no statutory requirement for vehicle owners to carry any automobile insurance at all.

WHAT DOES THIS MEAN TO THE AVERAGE FLORIDIAN AND WHAT DO WE KNOW?

Here is what we know now. Based on information obtained from the Florida Department of Highway Safety and Motor Vehicles, we know there are twelve million(12,000,000) vehicles registered in Florida. Four million (4,000,000) of those vehicles are currently insured without Bodily Injury Coverage.

We know the average consumer who purchases a policy without Bodily Injury Coverage is generally one who buys only what he or she is required by law to buy in order to register a vehicle. The coverage these individuals carry is Personal Injury Protection with a limit of $10,000, and Property Damage with a limit of $10,000.

We know the Florida statute which governs the purchase of Personal Injury Protection currently provides that “an insurance carrier may not issue a policy with Personal Injury Protection without also including a minimum of $10,000 Property Damage.”

We know there is no mandatory liability coverage in Florida. Thus without the purchase of Personal Injury Protection, which will not be required after September 30th, there is no statutory requirement for the purchase of any other coverage.

What does this mean to the other eight million vehicle owners who do carry more than the current “required minimum” amount of insurance? Some carriers will tell you that it means individuals will no longer have to buy Personal Injury Protection, which will save policyholders money. This may not be true for many many drivers. In fact, this could be very, very costly.

What happens when one of those four million people who previously bought what the law required them to buy in order to register their vehicles no longer carry any insurance? If your car is hit by another vehicle after currently required Personal Injury Protection is no longer required, it means there is a one in three (that’s 33%) chance you will be hit by an uninsured motorist.
 
If you own a newer vehicle, you will probably carry coverage called “collision coverage.” You will have a deductible. This means you will have to pay the deductible out of your pocket if there is damage to your vehicle and you want your vehicle repaired. You can, of course, sue the person who hit you for your out of pocket expense, AND your insurance carrier will certainly try to collect the money that they and you spent to repair your vehicle. This is called subrogation. But, keep in mind that the person who hit your vehicle is so financially irresponsible that he/she chose not to carry insurance. If this person could not or would not pay three or four hundred dollars for insurance, if you win a lawsuit, can this person write a one thousand or two thousand dollar check to repair your car and pay your legal expenses?

What do you think will happen to insurance rates for people who choose to buy insurance coverage, but have a 33% chance of being in an accident with someone who will not or cannot pay to repair the insure person’s mangled car or body?

Like any other business, insurance companies are in business to make a profit. If they have to pay claims for accidents caused by the 33% of drivers who carry no insurance, everyone’s rates will increase to offset the money that is not collectable from the uninsured drivers. Thus, there may be no savings a person who purchases insurance finds his/her policy cost is a little lower because Personal Injury Protection is omitted.

Many people feel there is “too much government” in our lives today. That is probably true. However there are certain areas which require government intervention. Mandatory seatbelts may be one. It is our collective opinion that automobile insurance is also one of those areas.

WHAT CAN YOU DO?
 
As a Citizen of Florida, you can contact your Member of the State House and the State Senate. Let them know you WANT MANDATORY AUTO INSURANCE. If you don’t know who represents you in the House and Senate, you can find their names and addresses on the internet at WWW.MYFLORIDAHOUSE.GOV.

Email, write and/or telephone your State House and State Senate members. Simply tell them you want Florida to continue to be a mandatory auto insurance state. Remind them the current mandatory law expires September 30th. Therefore, they cannot wait until the 2008 Legislative Session. They must call a Special Session before September 30th to address this most urgent issue. Communicate the same message to Governor Crist. Governor Crist and your State Legislators need to know what you think.

TELL THEM!