The answer to this question always surprises my clients. At the beginning of the seventies, Florida adopted the no fault law as to medical expenses which is still in force today.
The general public knows this type of insurance coverage by several names: a) PIP [personal injury protection], b) No Fault Insurance, c) Mandatory Insurance to obtain your vehicle’s tag. This third name is how the majority of the public is acquainted with it.
The theoretical underpinning of this insurance scheme is based on the following premises:
- An automobile accident is a horrible occurrence.
- Therefore, we want that all persons be able to pay the related medical expenses irrespective of fault.
The adoption of the philosophy means that you are responsible for the payment of your own medical expenses up to $10,000.00 even if you are not at fault for the accident. Neither the driver at fault nor his insurance company have to pay your first $10,000.00 in medical expenses. For example, “driver at fault” runs a stop sign and fractures his foot. He also causes the other driver a fractured arm.
The insurance company for the other driver will pay his medical expenses up to $10,000.00 and the insurance company for the party at fault is only responsible for the medical expenses that exceed $10,000.00. However, the company for the driver at fault will also have to pay medical expenses for the driver at fault up to $10,000.00.
What happens if the party at fault does not have automobile insurance and the medical expenses exceed $10,000.00?
The answer to this question is very important. The high cost of medical care nowadays virtually guarantees that if a person needs to be hospitalized the $10,000.00 in medical coverage provided by his automobile insurance will be exhausted right away. If the driver at fault does not have insurance and the other driver has health insurance, the other driver will be able to collect from his health insurance his medical expenses over $10,000.00. The driver at fault is personally responsible for all his medical expenses.
What happens if neither driver has automobile insurance?
If they have health insurance, their health insurance companies will pay for their medical bills in accordance with their policies. If they do not have health insurance, both drivers will be responsible for paying their own medical expenses up to $10,000.00 and the driver at fault will be responsible for paying the other driver’s medical expenses over $10,000.00.
Basically, the law makes every driver responsible for his first $10,000.00 in medical expenses irrespective of fault and requires that every driver buy automobile accident insurance to pay his own medical expenses up to $10,000.00.
Is there any logic to this insurance scheme?
No. This is because the driver at fault is not responsible for the first $10,000.00 in medical expenses of the other driver who is the victim of his negligence.
Does this auto insurance scheme make sense from the social point of view?
Yes. The goal of the legislature in enacting this law was to make sure that all parties in an automobile accident, irrespective of fault, could pay their medical expenses. I think this goal was accomplished.