Florida may be a “No-Fault” state, but that doesn’t mean you don’t need accident insurance. In fact, the law requires certain types of coverage. Knowing which type you have to have and which type you really need is a bit confusing. In my many years of experience with Florida car accidents, the one thing I know for sure is accident costs can be simply too huge to run the risk of being without adequate coverage.
There are two basic categories of car insurance policies: Third-party liability and first-party insurance. In simple terms, the “first-party” is YOU, the owner of the policy who has contracted with a “second-party” (the insurance company) for coverage. That leaves the “third-party” which refers to the other people in the accident. Therefore, first-party insurance covers YOU and your passengers, and third-party liability insurance covers the other people that you are responsible for injuring or damaging.
It can be overwhelming, but insurance is definitely not the place to save money by cutting corners. A single car accident could easily wipe out your savings, even if the accident wasn’t your fault. Here is a breakdown of the different insurance options in Florida.
Property Damage (PD) pays other people for damages done to their property. If someone files suit against you as the result of a car accident, this policy will financially protect you up to the limit of the policy. PD is mandatory in Florida. Following the same notation as above, property damage is the third number listed on the policy. For example, if the policy is 100/300/25, it would offer $25,000 worth of coverage to repair or replace others’ property (including cars).
Personal Injury Protection (PIP) is also mandatory in Florida. It covers 80 percent of your medical expenses and 60 percent of your lost wages, if you are in a car accident. It does NOT matter whose fault the accident was; PIP pays regardless of fault. It also usually covers you, your spouse, and the relatives living in your household. A typical policy provides for $10,000 in coverage.
Bodily Injury (BI) liability pays other people for injuries the policy owner has caused, including medical expenses, lost wages, and pain and suffering. This coverage is not required in Florida, but I strongly recommend it to protect your personal assets. The common notation for bodily injury policies looks like 50/100 or 100/300, where the first number is the dollar amount (in thousands) of total coverage that can be paid to each person who is injured or killed, and the second number is the limit (in thousands) that the company will pay for an entire accident, no matter how many people are injured or killed. I recommend at least 100/300 insurance ($100,000 coverage for one person’s injuries, $300,000 per accident).
Uninsured/Underinsured Motorist (UM) pays for your pain and suffering if you are hurt by the fault of another driver, and he/she either has no insurance or has too little insurance to cover the extent of your injuries. UM is not mandatory in Florida, but I cannot stress enough how important this type of coverage is. As I mentioned, Bodily Injury coverage is NOT mandatory in Florida. UM is the best back-up plan if you’re hit by someone with no coverage or inadequate coverage. When a family member was t-boned by a “phantom driver” who was never caught, UM coverage paid for her extensive suffering and costs due to post-accident surgery and therapy. Now, everyone in my family carries this insurance coverage. UM, like PIP, also applies, in some cases, to household relatives or to other passengers in your car.
Medical Payments (Medpay) often covers the 20% of medical bills that PIP does not. I do not, typically, recommend this coverage because the insurance companies want to get paid back from any monetary recovery you get for bodily injury through Medpay. If you have health insurance, Medpay may not be necessary.
Collision pays for damage to your own property, regardless of fault. It is not required in Florida and often comes with a $500 deductible.
Experiencing a car accident is stressful enough without having to worry about who will pay all of the costs surrounding your recovery. Having the right policies to suit your needs will make getting better and moving forward that much easier. If you have anymore questions about insurance coverage or how to navigate the insurance world after an accident, my legal team is ready to help!