Florida automobile insurance law can be very confusing. Many people shop to buy what they believe is “full coverage”. However, full coverage may not be what you believe it is and may leave you exposed to all consequences of an automobile accident. This may be a dangerous belief. You may think that because you have all the coverage required by Florida law that you are fully covered. Let’s examine that in a little more depth.
Required Coverage in Florida
First, understand that when you buy an automobile insurance policy to protect you from an automobile accident in Florida, the policy will be made up of different types of coverage. These are similar to options when you buy a car. You can buy some options and not others. So, automobile insurance policies may have many different coverages, or options, that make up the policy. The more coverage you have, the more protection for you and your family in case of an automobile accident or crash.
In Florida, you are only required to have two (2) two types of coverage to satisfy Florida law and obtain your registration. Going back to the car buying analogy, these two coverages are considered the standard options. You have to have these two coverages. The required coverages are Personal Injury Protection (PIP) coverage and Property Damage (PD) liability coverage. If you only purchase these two, basic coverages, you will have purchased the base model, but you will still be considered to have “Full Coverage” under Florida’s automobile insurance law.
In addition to the different options or coverages you have buy for your automobile insurance policy, different coverages may have deductibles and some may pay different amounts depending on the coverage. The number of different coverage options your an automobile insurance policy is determined by what coverages you want and how much you want to pay for those coverages. There are a number of different coverages, or options, that you can buy for an automobile insurance policy in Florida that will protect you from the consequences of a Florida automobile accident. I will review some of these coverages, or options, below.
PERSONAL INJURY PROTECTION (PIP) COVERAGE
This is one of the two coverages that you are required to buy in Florida to obtain your registration. This coverage is commonly know as PIP coverage (stands for Personal Injury Protection). When you are injured in an automobile accident or crash in Florida and need medical treatment, PIP coverage will pay 80% of your medical bills and 60% of your lost wages up to a limit of $10,000.00. That is, when a total of $10,000 is paid under this coverage for medical bills, lost wages or both, the coverage is exhausted. PIP coverage is primary for payment of treatment of injuries that you sustain in a Florida automobile accident. Even if you have health insurance, your PIP coverage will pay first. Your health insurance will not pay once they learn that you were in an automobile accident and have PIP coverage.
There is one thing you need to understand about Florida PIP coverage. Your PIP coverage pays a portion of your bills and lost wages no matter who is at fault for causing the automobile accident. This means that even if someone else causes an automobile accident and injures you, your PIP coverage will pay your 80% of you medical bills and 60% of your lost wages up to $10,000. A lot of people hear this and say, what?! Why should my insurance pay my bills if I didn’t cause the automobile accident? That is a very good question. Fortunately there is a logical explanation. Florida’s PIP coverage is a form of insurance called No-fault coverage. It might be better termed No Matter Who’s at Fault coverage. The purpose of No-Fault coverage was to eliminate the hassle of getting the insurance company for the person who caused the accident to pay the medical bills and lost wages. This was not always easy to do, especially when there was some disagreement over who was truly at fault. With No-Fault, Florida said we don’t care who was at fault. If you were hurt in an accident, you will look to your own automobile insurance company to pay a portion of your accident related medical bill and lost wages. All the automobile insurance companies who do business in Florida know this is the law and they write and price their policies accordingly. So you should not feel bad about using your own insurance to pay for medical bills and lost wages if you were hurt in an accident. You have paid for service this when you bought the policy. You should not feel conflicted about this.
PROPERTY DAMAGE (PD)
The other required automobile insurance coverage is with is known as Property Damage Coverage. Property Damage Coverage, or PD as it is commonly known, pays to repair or replace someone else’s car or property that you damage with your car. You must be at fault, or responsible, for causing the damage in order for this insurance coverage to apply. This coverage applies if you cause an accident or just back into someone else’s car or mailbox. So if you damage someone else’s car or property and they present a claim, PD coverage will cover the damages up to the policy limits that you purchased from your insurance company. For example, if you back into someone’s car at the supermarket and cause $3,000 worth of damage, your insurance company will pay to that that person’s car fixed as long as you have enough coverage. Most PD coverages have at least $10,000. You can buy higher limits if you want. Higher limits will protect you if you damage a more expensive car or damage a significant amount of property.
In summary, these two coverages, PIP and PD, are the only two coverages that Florida law requires you buy in order to get a registration for your car. And to circle back to what I said earlier, the purchasing of these two coverages means you have “full coverage” in Florida. As we will see below, Full Coverage may not be enough.
IS FULL COVERAGE OK?
Usually not. If you are injured in an accident, you may be entitled to collect damages from the at fault party for the medical bills and lost wages not paid by PIP and for your pain and suffering, loss of enjoyment of life and mental anguish. However, the at fault party must have Bodily Injury (BI) liability insurance for you to be able to make a claim for those damages. If the at fault party only has PIP and PD, there won’t be any insurance available from the at fault driver to pay for any of your damages. If you assume the at-fault driver will have adequate BI coverage, you may be in for an unpleasant surprise.
MED PAY COVERAGE
Med Pay coverage supplements your PIP benefits which pays only 80% of your medical bills and 60% of lost wages out of the $10,000 PIP limit.
Med Pay coverage does two things: it pays the 20% of medical bills PIP does not pay; and it lets you save your PIP coverage to pay your lost wages. This is important if an accident causes you to miss a significant amount of work. With Med Pay, your insurance company must reserve your PIP coverage for your lost wages and pay your medical bills out of the Med Pay coverage, until the Med Pay is exhausted.
Med Pay coverage is usually inexpensive. Be sure to inquire about the cost of Med Pay.
PROTECTING YOU AND YOUR FAMILY
Uninsured Motorist coverage (UM) is designed to protect you if the negligent driver does not have BI coverage. It takes the place of the at fault driver’s missing BI coverage. If you purchase UM coverage, you will have coverage for your damages, even if the negligent driver did not have BI coverage. As long as there are drivers with only PIP and PD, you need UM coverage to be fully protected.
If you have more than one car on your policy, be sure to buy “stacked” UM coverage, which increases the coverage for each car on the policy.
UM insurance is valuable coverage you should have. Many people are driving today uninsured. Do not wait until you or a loved one has an accident before you protect yourself.
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