The Great Out-of-State Policy Coverage Debate

By: Stephen Mellor

At this year’s FIFEC conference, we explored the often-overlooked intersection between Florida’s PIP laws and out-of-state auto insurance policies. With so many nonresidents driving in Florida—whether seasonally, temporarily, or unknowingly meeting legal thresholds, questions around PIP coverage, out-of-state coverage, and carrier obligations are becoming more frequent and more contested. Let’s break down when Florida’s No-Fault law applies to out-of-state policies, and how recent case law is shaping the rules for insurers, providers, and claimants alike.

Florida’s roads are filled with snowbirds, tourists, and transplants, many of whom carry auto insurance policies from other states. When these drivers are involved in accidents here, the question arises: do their insurers owe Florida PIP benefits?

Florida’s No-Fault law is already complex, but the involvement of out-of-state policies adds another layer of uncertainty. Thankfully, recent court decisions are helping clarify when Florida’s PIP laws apply to nonresidents and how insurers and medical providers should respond.

Florida’s No-Fault Law: A Quick Primer

Florida law requires every vehicle registered in the state to carry PIP coverage, which includes up to $10,000 in medical and disability benefits and $5,000 in death benefits. This coverage applies regardless of who was at fault and extends to household members, passengers, and even pedestrians—so long as the injuries didn’t occur in another self-propelled vehicle.

According to Florida Statute §627.733, this requirement applies not just to Florida residents but also to nonresidents who bring a vehicle into the state for 90 days or more over the course of a year. Once a driver crosses that threshold, they are legally required to register their vehicle in Florida and obtain a compliant insurance policy.

When Do Nonresidents Need Florida PIP? 

There are some exceptions under Florida Statute §320.37. For example, military members stationed in Florida under official orders, full-time students, and participants in certain academic programs may not be required to register their vehicles here. But those exceptions don’t extend to individuals who accept employment in Florida, register their children in Florida schools, or spend extended time in the state with their vehicles. Once those events occur, the law considers them residents for insurance purposes, and they are required to obtain PIP coverage.

How Out-of-State Policies Fit In

Many auto policies from other states contain Out-of-State Coverage provisions that promise to adapt coverage to meet the legal requirements of another jurisdiction. However, most of those clauses only activate if the state requires insurance coverage “whenever” a vehicle is operated within its borders.

Here’s the catch: Florida doesn’t impose that kind of constant obligation on nonresidents. It only requires compliance once the 90-day mark or other conditions are met. As a result, many out-of-state insurers aren’t contractually obligated to pay Florida PIP benefits unless their policy language goes beyond the minimum.

Two Key Court Decisions Set the Standard

The 2023 case of T.I.O. Medical v. Liberty Mutual* was an important moment. The policyholder, a Georgia resident, didn’t have PIP or MedPay coverage under their policy. After an accident in Florida, Liberty Mutual denied the claim, and the trial court upheld the denial. The provider appealed and the appellate court affirmed the trial court’s ruling and emphasized that Florida law doesn’t impose a general requirement for out-of-state drivers to carry PIP coverage “whenever” that nonresident uses a vehicle in Florida, as contemplated by the policy.

In 2024, Progressive v. Florida Hospital Ocala** followed a similar path. A Maryland policy offered $2,500 in PIP coverage, but a Florida medical provider argued the insurer owed $10,000 under Florida law. Although the trial court ruled that the policy language obligated Progressive to extend the full $10,000 in PIP benefits to the claimant for this loss to meet the minimum requirements under Florida law, the appellate court disagreed, citing T.I.O., and held that Florida law does not require a nonresident to maintain coverage “whenever” a nonresident operates in Florida. The Florida Supreme Court declined to review the case in 2025, cementing the ruling.

What This Means for Insurers and Providers

For insurers, the takeaway is clear: Florida courts will enforce policy language as written. If an Out-of-State Coverage clause is found only in the liability section of a policy—and not in the PIP or first-party benefits section, the courts are unlikely to interpret it as requiring PIP payments under Florida law. Courts won’t automatically rewrite policies to include Florida-mandated coverage unless the terms explicitly provide for it. Although the argument is somewhat unsettled in Florida as to whether the out-of-state coverage provision listed in the Liability section of the policy would apply to the entire policy including PIP coverage, appellate courts from other jurisdictions have held that the out of state coverage provision only pertains to an insurers responsibility to provide liability coverage under his provision and not first party PIP benefits coverage.[1]

Providers, on the other hand, need to look beyond just the location of the accident. Before submitting a PIP claim on an out-of-state policy, it’s essential to determine whether the insured was legally required to carry Florida PIP at the time of the crash. This may involve evaluating how long the individual has been in Florida, whether they’ve accepted a job here, or if they notified their insurer of a move or change in vehicle garaging.

Evaluating PIP Coverage in Disputed Claims

When dealing with these disputes, a few questions can help guide the investigation. How long has the driver been in Florida? Were they working here, enrolled in school, or maintaining a permanent residence? Did they notify their insurer about a move or change in their vehicle’s location? Was the policy rebased or rewritten in Florida at any point?

Supporting documentation, like driver statements, vehicle registration records, and employment or school enrollment information can help answer these questions and determine whether PIP benefits are legally owed under the driver’s out-of-state coverage.

A Word on Attorney’s Fees

Another wrinkle in these cases is the Florida attorney’s fee statute.  Fla. Stat. §627.101 which would allow attorney’s fees to be awarded via a Statute only applies to policies issued for delivery in Florida. Thus, the Plaintiff must look at the jurisdiction where the insurance policy was issued to determine whether there is an attorney fee shifting statute which would apply to a claim for breach of an insurance contract or applicable to that jurisdiction’s No-Fault Statute. Generally, most of these jurisdictions follow the “American Rule” which requires the parties in the lawsuit to bear their owns fees unless there is an exception to the rule such as an unreasonable denial or unreasonable refusal to pay benefits. However, Fla. Stat. §627.428 which provided attorney’s fees against an insurance company by a Plaintiff in a first party PIP claim was recently modified by HB 837 in 2023 and now a policyholder can recover attorneys’ fees only if it files a declaratory judgment action against the insurer when the insurer issues a “total coverage denial.”  

That’s in stark contrast to states like New York, New Jersey, Michigan, and Massachusetts, which impose mandatory interest and attorney fees on insurers who delay or deny PIP benefits without cause.

Final Thoughts: Florida PIP Is Still Alive

Despite legislative efforts to dismantle Florida’s No-Fault system, PIP remains a vital coverage, and out-of-state drivers are keeping it relevant. Whether an out-of-state policy must pay Florida PIP benefits often turns on a narrow set of facts: the driver’s residency status, how long they’ve been in Florida, what their policy actually says, and whether the insurer received proper notice of a change in risk.

Ultimately, costly assumptions hurt both insurers and providers. They should approach every out-of-state claim with a critical eye, ask the right questions, and review the policy language carefully. As Florida case law continues to evolve, one thing is clear: the details matter.

 

Footnotes:

[1] See Washington v. Titan Ins. Co. 2009 WL 3115956 (Mich. Ct. App. 2009); Nuckolls v. Mid Century Ins. Co., 838 S.W.2d 179, 182 (Mo. Ct. App. 1992); State Farm Mut. Auto. Ins. Co. v. Tenn. Farmers Mut. Ins. Co., , 645 N.W.2d 169 (Minn. App. 2002); Frost, et al v. Liberty Mut. Ins. Co. and USAA, 828 S.W.2d 915 (Mo. Ct. App. 1992).

Citations:

• * T.I.O. Medical Intervention, LLC, a/a/o Mary Faison v. Liberty Mutual Fire Ins. Co., 373 So.3d 341 (Fla. 4th DCA Sept. 20, 2023)
• ** Progressive Specialty Ins. Co. v. Fla. Hosp. Ocala, Inc., 395 S0.3d643(Fla. 6th DCA Oct. 14, 2024)