WHAT DOES MY CAR INSURANCE MEAN?

By Benjamin G. Partlow, Esq.

Have you ever looked at your car insurance declarations page or tried to get insurance online and wondered what all the different types of insurance do and what coverage you really need?  Well, this article will hopefully give you some insight into the different types of coverage, what it really does for you, and which types are recommended.  With each type of coverage, there are intricate details as to how, when and in what instances the coverage applies, but this article is only meant to be a broad overview.[1]

REQUIRED INSURANCES

If you own a motor vehicle in Florida, there are only two required types of coverage you must have:  Personal Injury Protection (PIP) and Property Damage (PD).  For both you must carry at a minimum $10,000.00 in coverage for each type.

PERSONAL INJURY PROTECTION (PIP) COVERAGE

PIP covers you regardless of whether you were at fault in the accident, meaning that even if you are at fault in an accident and you are injured your PIP covers you and pays for the things listed below.  If the accident is in Florida your PIP will cover you and your resident relatives regardless of the vehicle you or they are in.  PIP also covers passengers in your car who don’t own a vehicle or live with a relative who owns a vehicle.

PIP will pay for 80% of the covered person’s reasonable medical expenses which are medically necessary and related to the accident, 60% of wages you lose as a result of the accident and $5,000.00 in death benefits.

PROPERTY DAMAGE (PD) COVERAGE

Property Damage insurance will pay for damage that you or members of your family cause to another person’s property while driving, even if you are driving someone else’s car.  The term property is not limited to motor vehicles, but covers things such as fences, telephone poles, or buildings in addition to other cars.

OPTIONAL COVERAGES

BODILY INJURY (BI) COVERAGE

Bodily Injury insurance will pay for injuries which either you or relatives who live with you cause while they are driving a car, even if the car is not yours.  It will also pay for injuries which someone who drives your car with your permission causes.

Although Bodily Injury insurance is optional, it is an important coverage because it protects you in case you injure someone else in an accident.  If you cause someone’s injuries and you are sued by the injured driver if you have this coverage the insurance company is required to provide and pay for your legal defense and pay for damages to the injured driver within your coverage limits.  This coverage can also potentially protect you from the injured person attempting to go after your assets.

UNINSURED/UNDERINSURED MOTORIST (UM) COVERAGE

Uninsured/underinsured motorist coverage pays if you, your passengers or family members are hit by someone at fault and that person does not have insurance or does not have enough insurance coverage to cover the damages you sustained.  This coverage applies if you are in your car, in someone else’s car or are hit as a pedestrian, as well as a hit and run situation.  UM will pay for medical expenses, lost wages not covered by PIP, injury, sickness or death which are a result of an automobile accident cause by another person.

UM coverage is very important because it protects you in the event you are injured because of someone else’s fault and they either don’t have insurance or don’t have enough insurance.  In Florida, it is estimated that 24% of the drivers in the state are uninsured.[2]  This number does not take into account the number of drivers in Florida who have insurance, but only the minimum required amount, which does not include BI coverage which would pay for your injuries if that person injures you in an accident.  This would potentially leave you in a situation where the only insurance to cover your medical bills would be your own PIP, in which the minimum coverage is $10,000.00 and a trip to the hospital alone could easily exceed that amount.

COLLISION COVERAGE

Collision insurance pays for damage to your car if it is in an accident with another car, hits an object, or turns over, regardless of fault.  This coverage does not pay for injuries you cause to another person or damage to another person’s property you cause.

COMPREHENSIVE COVERAGE

Comprehensive insurance will cover your car for damage done from incidents other than an accident, such as a fire, theft, flood, vandalism, windstorm or if you hit an animal.

MEDICAL PAYMENTS COVERAGE

Medical payments coverage is similar to PIP, except that it will pay for medical expenses beyond which are covered by PIP, such as the 20% co-pay which PIP doesn’t pay and any benefits once PIP coverage is exhausted.  Medical payments coverage applies regardless of who is at fault in the accident.

RENTAL REIMBURSEMENT COVERAGE

If an accident leaves your car inoperable, rental reimbursement coverage will pay you back for the cost of renting a car while your vehicle is repaired.

There are other types of insurance that you can obtain for your car, but these are the main ones offered in the state of Florida.  Ultimately, the decision on what you get is up to you (excluding the PIP and property damage requirements), but having the right coverage for the right situation can make all the difference in the world whether you are in an accident and injured through the fault of someone else or if you are at fault in an accident and injure someone else.[3]

[1] For all of those details an insurance agent or a lawyer who deals with automobile insurance should be able to answer questions.

[2] www.carinsurance.com/Articles/uninsured-motorist-coverage-state-averages-of-uninsured-drivers.aspx

[3] This article is for informational purposes only and is not intended to be legal advice.

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