What Is the Florida Financial Responsibility Law?

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If you’re new to Florida and considering a move, you might be wondering about the Florida Financial Responsibility Law when it comes to car insurance.
The short answer is that it requires Florida residents who own or drive a motor vehicle more than 90 days to carry two types of insurance: Personal Injury Protection (PIP) and Property Damage Liability. The Florida Financial Responsibility Law is regulated by the Department of Highway Safety and Motor Vehicles.

Why does the Florida Financial Responsibility Law exist?

In a car accident, there are two major risks for damages. The first is the involved vehicles sustaining damage, such as dents and scratches. The second is the risk that people are harmed. The Florida Financial Responsibility Law aims to ensure all drivers have insurance protections against these two risks.
The reason why this law came into being likely stems from the high accident rates in Florida compared to the rest of the United States. In 2018, for example, more than 400,000 crashes were reported in the state. More than 250,000 of those resulted in bodily injury, and more than 3,000 of those were fatal, according to Florida Highway Safety and Motor Vehicles. For drivers involved in those accidents, having both personal injury protection and property damage liability softened the financial blow.

What is personal injury protection?

Personal injury protection (PIP) is required for drivers in possession of a vehicle over 90 days and in a minimum limit of $10,000. For vehicles registered as taxis, the required limits are $125,000 per person and $250,000 per occurrence. PIP covers 80% of costs for any significant injuries totaling more than $2,500 in damages, regardless of which driver was at fault. The types of damages covered include:
  • Medical bills
  • Disability
  • Survivor’s loss
  • Funeral costs
  • Lost income
Personal injury protection pays out quickly without involving outside insurance companies, which is a great benefit to individuals needing to pay for medical care and related expenses quickly.

What is property damage liability protection?

The minimum worth of property damage liability under the Florida Financial Responsibility Law is $10,000, which is equal to that of PIP. For taxis, the minimum limit is $50,000. As with PIP, property damage liability coverage also applies regardless of who is at fault. It helps pay for the following types of damages to material property:
  • Vehicle damage
  • Damage to other structures, such as houses or sheds
  • Damage to other stationary objects, such as telephone poles or street signs
  • Damage to lawns or sidewalks
It is possible to carry a higher limit on property damage liability insurance, which comes with a higher premium.

What are the consequences of not carrying both types of insurance?

If a driver is found to be in violation of the Florida Financial Responsibility Law, there are steep consequences. If an accident has occurred, the driver is potentially responsible for paying all damages out of pocket. This can spell financial disaster for the person at fault, incurring risk of losing personal assets or even having to file bankruptcy.
Even if no accident occurred and noncompliance with the Florida Financial Responsibility Law was discovered, there are severe penalties. First, the driver’s license and tags can be suspended for up to three years. Once the period of suspension is over, the driver must pay a $15 reinstatement fee and provide proof of both PIP and property damage liability coverage at the minimum levels.

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