Clients come to me after a car accident and invariably tell me that they have “Full Coverage” when I ask them about their car insurance. Everyone seems to think they are fully covered, even if they have only the minimum coverage required by law. In Florida, the law states that you must carry Personal Injury Protection benefits and Property damage liability coverage of a minimum of $10,000 or “have the ability to pay that amount”. Which means, you don’t even have to have Property damage liability coverage if you have the ability to pay. If you damage someone else’s property and they sue you and get a judgement which you cannot pay, they can send it to Tallahassee and have your license suspended. Personal Injury Protection benefits, commonly known as PIP, pays 80% of your medical bills and/or 60% of your lost wages, up to $2,500 if you don’t get an EMC opinion from a doctor within two weeks of the crash, and up to 10,000 if you do. The 20% deductible can be coverage by an additional coverage known as Medical Payments coverage or MedPay, which costs an additional premium. Comprehensive and Collision coverage pays for the damage to your car, which you don’t need if you drive a jalopy, but which will be required if your car is leased or has a bank loan on it. This coverage may have a deductible, typically $500 or $1,000 and it is cheaper the higher the deductible. So what if you hurt someone else?
If your negligence causes an accident in which another person gets hurt, you can be covered for this risk by having Bodily Injury Liability coverage or “BI”. The lowest form of this is typically $10,000 per person/$20,000 per occurrence which means if you hurt more than one person, the total payable will be up to $20,000. For an additional premium, this coverage can be incrementally raised to 25/50 or 100/300 or 500/1,000,000. You could also purchase an “umbrella” or excess coverage over and above those liability limits if you have personal assets to protect. Most important of all is the coverage most folks don’t have which is Underinsured/Uninsured motorist coverage or “UM”. This covers injuries to YOU if you are in an accident caused by someone else who has either NO BI liability insurance or insufficient amounts of it to pay for your injuries. In Florida, when you purchase BI you must be offered UM up to the same amount, and in order to refuse it you have to sign an informed rejection form. Since this coverage is not required and costs extra, I believe most insurance policy sales’ people use this “savings” as a way to get a sale, and clients are not told how important this coverage really is. Especially since according to recent data, the state with the highest rate of uninsured motorists is Florida, with an estimated rate of 26.7%. This makes sense considering Florida is the only state that does not require drivers to have bodily injury liability insurance. Currently there is legislation under consideration to do away with PIP coverage and to require all drivers to carry at least 25/50 BI coverage. Personally, I think they should keep PIP AND require this coverage as well as UM.
According to the Insurance research counsel, twenty-four states require UM, and while you can only buy UM up to the limit of your BI coverage, you can “stack” it if you own more than one vehicle, (multiply it by the number of cars you own) and you can add UM to your umbrella coverage. Corporations, especially one’s that use large trucks in their business, typically have large liability policies and excess coverage as well, so if you are involved in a crash with an 18-wheeler, there will usually be a large policy involved. If you are struck by an at-fault driver of a jalopy, you are not “fully covered” unless you have UM. Many of the bigger insurance companies sell policies through dedicated agents like Allstate and State Farm, or online like “The General” while others sell through independent agents who can represent several companies. You should price identical coverages at both before buying. Don’t be fooled by the catchy commercials, the only way you save 15% in fifteen minutes is by getting less coverage. Make sure when you shop that you are comparing apples to apples. Other optional coverages include Rental car coverage and full value coverage, of course with added premiums. If you have health insurance, it will typically not pay for medical bills resulting from an accident until the PIP and MP is exhausted and then they will have a lien to be reimbursed if you make a claim against the at-fault driver’s insurance.