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The Florida Senate

President Office — Press Release


January 26, 2021

CONTACT: Katie Betta, (850) 487-5229

Legislation to Repeal Florida’s Motor Vehicle No-Fault Law Passes First Committee

SB 54 Repeals PIP, Requires BI Coverage, Creates Best Practice Standards for Claim Handling

Tallahassee —

The Senate Committee on Banking and Insurance, chaired by Senator Jim Boyd (R-Bradenton) today passed Senate Bill 54, Motor Vehicle Insurance, by Senator Danny Burgess (R-Zephyrhills). The legislation repeals Florida’s current Motor Vehicle No-Fault Law, which requires drivers to carry personal injury protection coverage, instead requiring that drivers carry bodily injury liability coverage.  The bill also creates best practice standards for handling motor vehicle insurance claims.


“For everyone’s protection, drivers must be insured at sufficient levels. Our goal is to lower the number of uninsured and underinsured drivers and provide a greater safety net in the event of an accident,” said Senate President Wilton Simpson (R-Trilby).


“Florida’s No-Fault Law has failed to significantly reduce litigation. Meanwhile, the cost of PIP remains high, when compared to the benefits it provides,” said Senator Burgess. “Senate Bill 54 transforms this ineffective and outdated insurance structure, which we believe will lead to a more stable insurance market and better outcomes for insured Floridians when they face the unfortunate and in some cases tragic circumstance of being involved an a serious vehicle accident.”


Repeals No-Fault, Requires Bodily Injury Liability Coverage

SB 54 repeals the Florida Motor Vehicle No-Fault Law (No-Fault Law), which requires every owner and registrant of a motor vehicle in this state to maintain Personal Injury Protection (PIP) coverage. The bill enacts financial responsibility requirements for liability for motor vehicle ownership or operation, as follows:

  • For bodily injury (BI) or death of one person in any one crash, $25,000, and
  • Subject to that limit for one person, $50,000 for BI or death of two or more people in any one crash.
  • Retains the existing $10,000 financial responsibility requirement for property damage.
  • Revises required coverage amounts for garage liability and commercial motor vehicle insurance, and increases the cash deposit amount required for a certificate of self-insurance establishing financial responsibility for owners and operators of motor vehicles that are not for-hire vehicles. 
  • Repealing the No-Fault Law eliminates the limitations on recovering pain and suffering damages from PIP insureds, which currently require bodily injury that causes death or significant and permanent injury.


Requires Medical Payments Coverage

SB 54 requires insurers to offer medical payments coverage (MedPay) with limits of $5,000 or $10,000 to cover medical expenses of the insured. Insurers may also offer other policy limits that exceed $5,000, and may offer deductibles of up to $500. The bill requires that insurers must reserve $5,000 of MedPay benefits for 30 days to pay physicians or dentists who provide emergency services and care or who provide hospital inpatient care.


Creates Best Practice Standards for Claim Handling

SB 54 creates a new framework to govern all third-party bad faith actions for failure to settle related to motor vehicle insurance. The bill requires insurers to follow claims handling best practices standards based on long-established good faith duties related to claim handling, claim investigation, defense of the insured, and settlement negotiations.


The bill establishes that it is a condition precedent to bringing a third-party bad faith failure to settle action that the claimant serve a demand for settlement. The demand must:

  • Identify the date and location of the loss, the claimant, and insured.
  • State the legal and factual basis of the claim.
  • Detail the claimant’s injuries, medical treatment, and the amount of current and reasonably anticipated future damages.
  • Demand a settlement amount, which may not exceed the insured’s policy limit.
  • Release, if accepted, the insured from any further liability.
  • Not provide conditions on the settlement other than payment of the demand and the ability of the claimant to take an examination under oath of the insured.


The bill allows the third-party bad faith claimant to condition the demand for settlement on taking a two hour examination under oath (EUO) of the insured limited to discovering recoverable assets. The bad faith claimant may withdraw the demand for settlement after the EUO. If the insured refuses to submit to the EUO, the insurer may tender policy limits without obtaining a release of the insured and may not be held liable if there is an excess judgment against the insured.


The bill provides that in a third-party action for bad faith failure to settle  the insurer is not liable for bad faith if the insurer tenders policy limits within 30 days of receiving a demand for settlement.


Allows for Named Driver Exclusions

SB 54 authorizes the exclusion of a specifically named individual from specified insurance coverages under a private passenger motor vehicle policy, with the written consent of the policyholder.


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