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Insurance Coverage 101: A Quick Primer On Insurance Coverage

As a Florida Personal Injury Attorney, I am often asked by clients; what is the proper amount of insurance to have and what types of coverage should be on an automobile policy. In Florida, it is mandatory for every driver with a registered vehicle to have liability insurance coverage–should they ever be involved in an automobile accident. Also in the state of Florida, all insurance policies must be issued through a Florida agent with an insurance company licensed to sell insurance Florida. Drivers are instructed to no longer maintain their policy issued in their previous state of residence.

Below are the minimum requirements for car insurance in Florida:

  • You must carry $10,000 worth of property damage coverage to pay for the other party’s car repairs if you were at fault (this does not include costs for your own auto damage if you were the party at fault).
  • You must also carry $10,000 worth of personal injury protection (PIP) to pay for the first $10,000 of your medical bills and lost wages (Florida is a no-fault state and your own insurance company must pay 80% of your medical bills and 60% of your lost wages up to $10,000).

Surprisingly, nothing else is required in Florida to get behind the wheel and drive down the road. If that isn’t frightening enough, more than 50% of people driving on the road today only carry this minimal insurance policy and some may not have any insurance at all, meaning they are driving illegally (according to statistics, approximately 23% of drivers are on the road without any insurance at all and the number is steadily rising) [1].

Preparing yourself with adequate insurance coverage is the most important thing you can do to protect yourself in the unfortunate event of an accident. Here are Dolman Law Group’s recommendations on what insurance would be sufficient for maximized protection:

  • Purchase Collision Insurance for your auto policy. If you lack collision insurance, you will have to pay out of pocket to repair or replace your vehicle if:
    • The damage to your car is quoted to be more than $10,000
    • The at fault party is driving illegally with no insurance
    • You were responsible for the accident
  • Purchase GAP Insurance to protect yourself in the event your car is worth less than the amount of your bank loan, which is dubbed being upside down on a loan. If you don’t have GAP insurance you will have to pay the difference out of your own pocket if:
    • Your car is totaled and you owe more to the bank than the car is actually worth
  • Purchase Extended Personal Injury Protection (PIP) ($50,000 to $100,000 is our recommended minimum) to protect yourself if:
    • Your medical bills and lost wages are more than $10,000. Remember: $10,000 in PIP coverage may be exhausted before you even leave the emergency room
    • You have severe injuries. It may take a while for your case to settle or be tried and this will help you get through the financially rough times.
  • Purchase Medical Payment Coverage ($5,000 recommended minimum) to protect yourself for the following reason:
    • To cover the percentage that PIP does not pay (PIP only covers 80% of medical bills you are responsible for the remaining 20% of medical bills) and more.
  • Purchase Bodily Injury Liability (BI) ($100,000 per person/$300,000 per accident recommended, or more if you have substantial assets) coverage to protect yourself if:
    • You were at fault in an accident and caused serious injury (this will protect your personal assets).
    • You need to purchase UM coverage and in order to be eligible to get UM coverage you must first have BI.
  • Purchase Uninsured/Underinsured Motorist Coverage (UM) ($100,000/$300,000 recommended minimum and make sure to get “stacked” coverage if you have more than one car) to protect yourself if:
    • The at-fault party has minimal or no liability insurance and your case is worth more than the amount of insurance the other person has. (For example: If you have a $100,000 case and the other person only has $10,000 of liability insurance, you can collect the remainder due to you from your own insurance company if you have at least $90,000 of UM insurance.)
    • We recommend that you purchase “Stacked” UM if you have two or more vehicles on the same insurance policy. One is eligible to get additional UM or “stacked coverage” at a reduced cost. (For example: If you have 3 cars on the same policy each with $100,000 BI, you can purchase up to $300,000 of stacked UM coverage for a very small additional premium and greatly expand the protection to you and your family)–this allows for a lot more insurance coverage at a very low cost [2]

Other insurance factors you need to know about:

If you have health insurance, it will commence after personal injury protection has been used up or “exhausted” to pay your medical bills. Moreover, it may also account for the 20% of medical bills not covered by PIP. However, it’s essential to be aware of two facts. The first is that when your health insurance does kick in, you may be stuck with an expensive co-pay depending on your policy. The other fact to know is that after your case is settled, your health insurance company may go after a portion of your settlement to cover what they have spent on your medical bills.

Only an experienced lawyer knows what the health insurance company is entitled to and how to negotiate with them. Just because you have planned accordingly and purchased the UM coverage with your insurance carrier (even if you have been a loyal customer for 25 years), this does not necessarily mean the insurance company will simply part with their money. Most likely you will need to retain an attorney in severe injury cases in order to get a fair cut from your own insurance carrier. That being said, at least with UM coverage, you can go after an insurance company who has plenty of funds, rather than some negligent driver with minimal or no insurance coverage.

Dolman Law Group

All of these insurance coverage recommendations may sound expensive, but you will be relieved to find out it costs a lot less than you probably think, especially if you have a clean driving record. We suggest you avoid the so called “low cost”, “we insure anyone” insurance carriers, and research competitive pricing from the major, well-known companies. Remember, bodily injury insurance protects others (strangers) who are injured in the accident. UIM (uninsured/underinsured) insurance coverage protects you, your family and anyone else who was injured while in your automobile. It’s unsettling to see an insurance policy with $100,000 worth of BI coverage and no UIM protection. In my opinion this should be considered negligence by the insurance agent or carrier. Why would anyone choose to protect strangers and not themselves and their family?

Therefore, if you have any questions concerning the advice we have provided and would like to consult with a Florida Personal Injury attorney, call the Dolman Law Group today at: (727) 451-6900 for a free consultation and case evaluation.

Dolman Law Group
800 North Belcher Road
Clearwater, FL 33765
(727) 451-6900

https://www.dolmanlaw.com/legal-services/personal-injury-attorneys/pip/

References:

[1] http://www.flains.org/fact-book-othermenu-38/905-auto-insurance/5082-florida-has-among-highest-uninsured-motorists-rates-in-the-us.html
[2] http://www.flhsmv.gov/ddl/frfaqgen.html
[3] https://www.dolmanlaw.com/billing-requirements-pip-benefits/