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What Type Of Car Insurance Do I Need?

Let’s get back to basics on automobile insurance. The reason I want to go over this basic material is because so many drivers still believe they can purchase “full coverage” and actually be fully covered!  I know buying what your insurance agent calls “full coverage” sounds like it would actually fully cover you, but that is simply a lie.  What full coverage means is actually the state-required minimum coverage to be legal!  That means when you have “full coverage” you actually get the state minimum.

What is the Florida state minimum insurance coverage?

There are only two types of insurance that Florida requires:

  1. PIP insurance or Personal Injury Protection: This is the insurance that causes Florida to be known as a “No-Fault State.”  This coverage protects you when you are hurt because of an automobile, no matter who is at fault.  That is all “no-fault” means.  Regardless of any fault, you MUST use your PIP coverage to pay for your first $10,000in medical bills and/or lost wages.  This coverage does not protect you from the other side suing you if they are permanently injured and will not pay for your pain and suffering past, present or future.  It only covers the first $10,000 of medical bills and/or lost wages.
  2. Property damage insurance:  The state requires all car owners to have a $10,000 property damage policy on their car.  That type of insurance covers the damages your car causes to other people’s property.  It does not cover your property and does not help if your car is damaged because someone crashes into you and that person is driving uninsured (which happens a lot in Florida).

Many drivers think they can get by with this minimum coverage, but it is often not the case.  Certainly, we all want to drive around for years without an accident.  As long as you are accident-free you are wasting your money on insurance.  But it is almost impossible to drive forever without an incident.  When you drive your car with minimal insurance you are exposing your family to the risk of devastating financial hardship if and when that accident occurs.

There are many important aspects of automobile insurance coverage. Remember that having the right insurance after a Florida car accident can make all the difference.  We have seen the extremes in our practice, where insurance has helped secure the best medical treatment and set a person back on the right track in life.  We have also seen how the lack of insurance has destroyed a family and ruined their ability to survive and care for their children.  Don’t be penny wise and pound foolish; think hard and make the sacrifices necessary to protect your family when driving the dangerous roads and highways here in Florida.

Here is a list of each type of available auto insurance and whether it is a mandatory purchase in Florida or just a good idea. You can make your own decisions, but this will give you a guideline on what to buy:

Personal Injury Protection (PIP) Insurance – Mandatory.  This $10,000 insurance can be purchased with up to a $1,000 deductible.  The savings are minimal for the PIP deductible, so skip it if possible.  Also, keep in mind that PIP only pays a portion of the medical bill pursuant to a state-mandated repayment schedule.  The PIP statutory scheme is complex.

Property Damage (PD)Insurance – Mandatory $10,000, but coverage in excess of this is available.  Most cars cost far more than $10,000, so if you want to make sure you are not sued over just the car damages you should get at least $50,000 in coverage.  This is not expensive insurance, so the value of the extra coverage is worth it.

Bodily Injury Coverage (BI) Insurance – Voluntary insurance. The amount you purchase depends on the coverage you desire.  This is the insurance that protects you if you hurt someone else in an accident.  BI only protects you from harm to a person’s body and life, thus the name bodily injury.  It does not protect you from damages related to their property damages, tow bills or other related damages.  It also does not cover you if the other person hurts you, and they do not have insurance.  It is amazing how the cost of medicine and the number of procedures a person can have after a relatively minor incident.  Here in Florida people regularly end up with medical bills of $80,000 to $150,000 after small impacts because they need to undergo minor neck or back surgeries to fix herniated discs.  These are great operations but have a huge price tag to get done.  To properly insure your family we suggest a minimum of $100,000/$300,000 coverage.  I will explain the two numbers: The first number ($100,000) is the maximum any one person can get from your insurance.  The second number ($300,000) is the maximum coverage for the entire incident.  If you hit a car with 5 passengers the most any one of them will get is $100,000, but the most the total of the 5 people will get is $300,000.  Usually, those cases go to mediation, and the money is divided up in an equitable fashion by the mediator.  If you have any real assets you may want to up your coverage to $250,000/$500,000.  The price difference is not as much as you would think and the coverage is hugely different.

Uninsured and/or Underinsured Motorist Coverage (UM/UIM) – Here in Florida UM and UIM work identically the same.  That is not true in all states, but the basic concept is the same across the board. UM covers you when a person hurts you in a car and is not insured or is underinsured and cannot cover your damages.  This is the most common event in our law practice.  We handle a variety of cases, but we see so many significant car and Florida truck accidents and in a majority of them the at-fault driver is either uninsured or under-insured.  If our client does not have UM/UIM they will be stuck with whatever that other driver has to offer. Don’t believe for a minute that the “other guy” will have the proper insurance; they likely won’t!  In fact, it is logical that the worst and most irresponsible drivers are also the people who are irresponsible and don’t purchase coverage to help someone else if they injure them.  So, go buy the right insurance to protect yourself and your family from those bad drivers.  In the state of Florida, more than half of all accidents involved either an uninsured or an underinsured driver.  While this is the most expensive add-on to the insurance package, it is the most worthwhile given the number of uninsured drivers on the roads.  We suggest the same coverage amounts as noted in the BI section above.  You can’t get more UM/UIM than you have in BI, so keep that in mind when buying the total package of insurance.

Bodily Injury Coverage vs. Uninsured/Underinsured Motorist Coverage Video

Comprehensive and Collision (Comp & Collision)Insurance – These two insurances go together because they cover the property damage done to your car and your property.  Notice the state minimum of PD only covers the other guy’s property.  What about your property?  What about the new iPad on the front seat that is destroyed and the entire rear of the car that has $18,000 in damages to fix.  If the other guy has the state minimum, you get $10,000 for it all and must come out of pocket to get your stuff fixed.  That isn’t right or fair, but it is fact.  Protect yourself by getting a decent Comp & Collision policy.  You can set it up with a deductible; we suggest $500, so it won’t be too expensive.

There are a number of other add-on insurances that will help you if you are hurt in an accident, but they are less needed than the ones noted above. Two that may be of interest:

Medical Payments (Med Pay) – This is an add-on to what is already covered by PIP.  Since PIP only pays 60% to 80% of your medical bills and can have a deductible, buying extra coverage to fully pay your own medical bills is a great idea.  This is especially true because this insurance is really inexpensive.  We suggest a $5,000 Med Pay rider to cover what PIP won’t pay.

Rental Reimbursement (RR) – It takes days or weeks to get your car fixed.  Who pays for your rental? If the other person is at fault they may be nice and offer to pay your rental car fees, but don’t count on it.  In 25 years of practice, no guilty party has yet to offer up a free rental car.  Instead, the insurance companies’ battle is out and that takes way too long.  People need their cars immediately, so the premium cost of rental car insurance is usually worth it.  Of course, if you recognize you are saving the premium, then don’t complain when you have to pay upfront for the rental, even if you get paid back at the end of the case.

We wish you safe driving and hope you don’t need to use the above coverages, but if you or a loved one are ever in need of advice or help in an automobile or truck accident claim, please call us.  Our telephones are answered 24/7 and an emergency attorney is always just a phone call away!

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