Form CA 02 67: Florida Changes - Personal Injury Protection
1. What the form is
The CA 02 67, titled "Florida Changes - Personal Injury Protection," is an endorsement to the standard Commercial Auto Coverage Part (e.g., CA 00 01 - Business Auto Coverage Form). Its primary purpose is to modify the policy's Personal Injury Protection (PIP) coverage to align with the specific requirements of Florida's No-Fault Law. Florida law mandates PIP coverage for most vehicles registered in the state, and this endorsement ensures that commercial auto policies comply with these unique statutory provisions. It details how PIP benefits will be paid, who is covered, and any specific exclusions or limitations as required by Florida statutes. Essentially, this form tailors the broader, more generic PIP coverage found in a standard commercial auto policy to meet the precise, and often complex, PIP framework of Florida.
2. Classes of business it applies to
This endorsement is mandatory for any commercial auto policy written in Florida that includes PIP coverage for vehicles subject to Florida's No-Fault law. This applies to a wide array of businesses, regardless of industry, that own, lease, or operate vehicles in Florida. Examples include:
- Local Delivery Services: Restaurants, florists, auto parts stores, or any business using vehicles for local deliveries.
- Contractors: Plumbers, electricians, HVAC technicians, landscapers, and construction companies whose employees drive company vehicles to job sites.
- Sales and Service Businesses: Companies whose employees travel to meet clients or provide on-site services using company-owned vehicles.
- Transportation Services (within certain parameters): While specialized forms might apply to motor carriers for hire, businesses that transport their own goods or employees (not for public hire in a way that would subject them to different, more stringent motor carrier regulations) would use this endorsement on their Business Auto Policy. Note that taxis have specific, higher coverage requirements.
- Any business with a fleet of vehicles registered and principally garaged in Florida: This could range from a small business with a few cars to a larger enterprise with numerous vans or light trucks.
The key is that if the commercial auto policy is providing PIP coverage on vehicles subject to Florida registration and no-fault laws, this endorsement is necessary to bring the policy into compliance.
3. Special considerations
- Mandatory Nature: Florida law requires PIP coverage with a minimum limit of $10,000 for medical and disability benefits and $5,000 for death benefits. This endorsement is not optional if PIP coverage is being provided on a Florida-registered vehicle.
- Interaction with CA 00 01: The CA 02 67 modifies the CA 00 01 (Business Auto Coverage Form) or other commercial auto coverage forms like the Motor Carrier Coverage Form (CA 00 20) or Auto Dealers Coverage Form (CA 00 25). It doesn't stand alone but amends the base policy.
- Definition of "Insured": Florida's PIP statute has specific definitions of who is entitled to benefits (named insured, resident relatives, persons operating the insured motor vehicle, passengers, and even certain pedestrians/bicyclists). The CA 02 67 will reflect these definitions.
- Benefit Payouts: Florida PIP typically pays 80% of medically necessary expenses and 60% of lost wages, subject to the policy limit and other statutory conditions. There's also a requirement to seek initial medical treatment within 14 days of the accident to be eligible for full benefits. An "Emergency Medical Condition" (EMC) determination can affect the amount of benefits available.
- Exclusions: Florida law allows for certain exclusions from PIP coverage, such as for injuries sustained while committing a felony or intentional acts. This endorsement will incorporate applicable statutory exclusions.
- Out-of-State Coverage: The endorsement clarifies how PIP coverage applies if an insured Florida vehicle is involved in an accident outside of Florida but within the United States, its territories or possessions, or Canada.
- Tort Exemption: Florida's No-Fault law provides a limited exemption from tort liability for economic damages covered by PIP. However, lawsuits for non-economic damages (pain and suffering) are permitted if certain injury thresholds (e.g., permanent injury) are met. While the endorsement itself focuses on PIP benefits, understanding this interplay is crucial.
Real-world example: A Florida-based plumbing company has a fleet of vans. One of their plumbers, while driving a company van, is involved in an accident. The CA 02 67 endorsement on their commercial auto policy would govern how PIP benefits are paid for the plumber's injuries, regardless of who was at fault, ensuring compliance with Florida's specific PIP rules regarding benefit amounts, eligible medical expenses, and lost wages.
4. Key information for agents and underwriters
- Pricing/Rating: PIP is a significant cost component of Florida commercial auto insurance. The CA 02 67 itself doesn't set the premium, but its mandatory application means underwriters must accurately rate for Florida PIP exposure based on the state's specific loss history and benefit structure. Factors like territory, vehicle type, and any chosen deductibles or options (like excluding work loss benefits or adding extended PIP) will influence the PIP premium.
- Risk Assessment: Underwriters need to consider the unique aspects of Florida PIP. The broad definition of an insured, including resident relatives and potentially pedestrians, can increase exposure. The potential for fraudulent claims in Florida's PIP system is also a well-known concern that underwriters may factor into their guidelines and pricing.
- Coverage Gaps: Agents should ensure clients understand the limitations of PIP, such as the 80/60 benefit split and the $10,000 minimum limit (which can be quickly exhausted in serious accidents). While PIP is primary, Medical Payments coverage might be offered as an optional supplement. It's also crucial to explain that PIP does not cover damage to the insured's own vehicle (that's Physical Damage coverage) or liability for injuries to others beyond what PIP covers (that's Bodily Injury Liability).
- Underwriting Guidelines: Insurers will have specific underwriting guidelines for Florida commercial auto, heavily influenced by PIP exposure. This might include stricter driver eligibility criteria, review of loss history (particularly PIP claims), and potentially limitations on coverage for certain types of businesses or in certain territories known for high PIP fraud.
- Policy Term: Policies providing Personal Injury Protection in Florida may not be issued for a term of less than 6 months, with some exceptions (e.g., to achieve common expiration dates).
- Relationship to other Florida Endorsements: There may be other Florida-specific endorsements that interact with or are packaged with CA 02 67, such as those related to Uninsured Motorists Coverage or cancellation/nonrenewal provisions (e.g., CA 01 28 Florida Changes, or a Florida-specific cancellation and nonrenewal endorsement which might have a similar number but address different aspects than the PIP changes).
Real-world example for agents/underwriters: An underwriter reviewing an application for a new Florida-based courier service will pay close attention to the PIP exposure. They will verify that CA 02 67 is included, assess the driving records of all proposed drivers, and consider the territories where the couriers will operate. The agent should have already explained to the applicant how Florida PIP works, including the benefit limitations and the importance of prompt medical treatment post-accident, and potentially discussed options for higher PIP limits or Medical Payments coverage.