The Truth About Florida Auto Insurance: What you really need vs. what companies are trying to sell you
What types of car insurance are you required to carry in Florida?
Let us start this conversation by saying there is a difference between what you are “required” to have and what you really “should” have. The Florida law is unfortunately, pathetically, weak in what it requires drivers to have. You are only required to have $10,000.00 of Personal Injury Protection (PIP) and $10,000.00 of Property Damage Liability (PDL).
PIP will pay up to $10,000.00 of reasonable and customary medical bills, and documented loss wages connected with your automobile accident. The PDL will pay up to $10,000 of damages you cause to someone else’s property. So why do I consider this weak insurance requirements? First, Florida is the ONLY state that does not require an owner of an automobile to have Bodily Injury Liability Insurance (BI). This is the insurance that covers an owner in the event he is sued as a result of causing bodily injury to another individual. Therefore in addition to the numerous drivers that do not purchase any insurance whatsoever, and are in violation of Florida Law, there is also a large group who carries the minimum amount and therefore woefully underinsured in many instances. Second, the PDL requirement of $10,000.00 does not cover the value of any new car I can think of.
So what insurance should you carry? Obviously the minimum that is required, but you should really carry more based on your financial situation. That financial situation has two parts, the first is what can you afford, and the second is what you are trying to protect. Young people and those who are struggling financially will find it expensive to carry additional insurance. If your car is worth less then $10,000.00 then you may want to gamble that the accident is caused by the other side and the property damage will be covered. If you do not want to take that gamble then Comprehensive and Collision insurance is necessary. Comprehensive covers theft of your vehicle and damage caused by natural disaster such as a tree falling on your vehicle. (I actually lost a car from Hurricane Wilma that way). Collision will pay for the damage caused by either yourself or when the other driver is at fault but does not carry enough insurance to pay for your car. Let’s face it, most new cars cost significantly more then $10,000.00 and the other drivers PDL will not reimburse you for a total loss. Therefore consider having collision for cars with a value in excess of $10,000.00. If you have a loan this decision is often made for you. The company giving you a loan will require that you have comprehensive and collision and may actually charge you for insurance if the coverage you have lapses or is terminated. The loan company coverage is usually significantly higher then the coverage you can purchase.
In addition when you finance a car, the lender often requires that you have BI. Once again it is to your benefit that you purchase this on your own. How much BI you have depends on how much in assets you want to protect. In other words, if you have a lot, and you do not want someone you have injured taking your assets that you have worked hard to accumulate, you want BI to protect those assets. BI insurance is usually sold as 10/20, 25/50, 50/100, 100/300 or greater. The first figure stands for the maximum thousands in coverage the insurance company will pay one individual for the injuries he sustains. The second figure is the total in thousands the company will pay for all individual involved the accident. By example if you have 50/100 in coverage and four people are injured in the accident, the most an individual will receive is $50,000 and if one individual receives that amount, the most left for the other three injured parties is the remaining $50,000 left from the $100,000 maximum.
It should also be known that when you purchase BI or PDL, your insurance company will pay for the defense of any lawsuit brought against you. Therefore you do not have to worry about hiring any attorneys as the insurance company will take care of this. Though I believe the most important insurance to have is UNDER/UNINSURED Motorist (UM) coverage, you can not purchase this insurance unless you have purchased BI.
UM insurance provides you with insurance benefits to go after when the at fault driver who caused your bodily injuries either did not have any insurance (was uninsured), or was underinsured in that his coverage was not enough to compensate you for the value of your personal injuries. I say this insurance is the most important to have because there is often no alternative to reimburse you for the damages you have suffered. If you have medical bills PIP can pay your expenses, if you do not have PIP and have health insurance that can also pay your medical bills connected to an automobile accident. Some people who lose time for work may have a disability plan to utilize or even vacation or sick days. In severe cases you may be eligible for public assistance such as Social Security disability to replace loss income. But other then the BI insurance the other side may have, UM is the only insurance you can access to receive compensation for your PAIN & SUFFERING or disability you receive from an accident.
UM is often critical because it frequently comes into play in the most serious of circumstances. That being typically an injured party involved in an accident where the person misses a couple weeks of work maybe because they have had minor surgery or a cast on an extremity, an emergency room visit, some diagnostic tests, surgery, and rehab. The PIP is long gone and one is stuck with excess bills, no compensation for loss work, and an injury that may trouble the person for the rest of their life. If you have UM you can sue your own company for the expenses not covered, and your pain and suffering. The recommendation is to carry as much UM as you can afford; even if it means getting higher deductibles for collision and PIP, and lower limits for BI and PDL. It is about protecting your self! Not someone else. Insurances like medical payments coverage and rental car reimbursement just do not have the value compared to UM.
For your convenience here is a link about to requirements as to when you have to insure a vehicle.
If you have any questions about insurance and Florida law, please feel free to call Krakower Law at 954-474-4244