What is the Minimum Coverage Required?
In Florida, vehicle owners may be required to purchase two types of auto insurance.
The first type of auto insurance is outlined in the Florida Motor Vehicle No-Fault Law (s. 627.736, F.S.). It requires every person who registers a vehicle in Florida to provide proof they have personal injury protection (PIP) and property damage liability (PD), with minimum limits of $10,000 each. PIP covers injuries you and certain others may incur in an auto accident, regardless of fault. PD covers your liability if you damage property belonging to someone else in an auto accident. Examples might include another person’s vehicle, a telephone pole or a building.
Individuals who are in the State of Florida with their vehicle for more than 90 days in the last 365 days must carry these minimum limits of coverage. It is important to note that the 90 days do not need to be consecutive in order for the law to apply. Questions about titling or registering your vehicle or further clarification on how Florida’s auto insurance laws apply to you should be directed to the Florida Department of Highway Safety and Motor Vehicles. You may visit them online at www.flhsmv.gov or call (850) 617-2000.
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The second type of auto insurance is outlined in the Florida Financial Responsibility Law. It requires drivers who have caused accidents involving bodily injury/death or received certain citations to purchase bodily injury liability (BI) coverage with minimum limits of $10,000 each person and $20,000 each accident, referred to as split limits. You may purchase a policy that covers both types of insurance required with a single limit of at least $30,000. Drivers convicted of driving under the influence must purchase BI coverage in the amount of $100,000/$300,000 and $50,000 in PD liability.
The reason for the Florida Financial Responsibility Law is to require owners or operators of motor vehicles to be financially responsible for damages and/or injuries they may cause to others in an auto accident. The failure to be financially responsible may result in the loss of driving privileges in Florida. Although there are other ways to prove financial responsibility that are acceptable to the Florida Department of Highway Safety and Motor Vehicles, our publication deals strictly with insurance.
Bodily Injury Liability (BI)
This coverage protects you for injuries or death to someone else that you are legally liable for after a motor vehicle accident. As the owner of a vehicle, anytime an accident occurs involving your insured vehicle (whether or not you are driving), the possibility exists that you may be held financially responsible for any damages. This coverage not only covers the actual loss incurred, it can also provide coverage for your defense if you are sued.
When referring to BI limits of liability, the first number represents the maximum amount of coverage you have for each individual injured in a given accident and the second number is the maximum amount of coverage available to all injured persons in that accident.
Let’s look at an example:
You cause an accident and there are two people in the other vehicle. You chose to carry BI limits of $10,000 per person and $20,000 per occurrence. Person “A” sustained $25,000 dollars in injuries and Person “B” sustained $15,000 in injuries. How will your policy respond?
|Person “A”||Person “B”|
|Their PIP Coverage:||$10,000||$10,000|
|Payment from Insurer:||$10,000||$5,000|
Making a decision about the amount of coverage you should carry is a personal decision based on many factors. Discussing your coverage needs with a qualified insurance agent can help you better understand your options. It is important to remember that if an accident occurs, and the injuries sustained by another party are beyond the limits of your insurance policy and the injured party has a permanent injury, scarring, disfigurement or is killed, they or their beneficiary may pursue recovery from you through the court system.
Property Damage Liability (PD)
PD liability pays for damage to another person’s property caused by you or someone else operating your insured vehicle. Most often this coverage will be used to repair the other automobile(s) involved in an accident with your insured vehicle. It can also be used to pay for damage to street signs, mailboxes, buildings or other property owned by another party.
Section 627.737, Florida Statutes, states the threshold has been pierced when an injury from a car accident results in significant and permanent loss of important bodily function, permanent injury, significant or permanent scarring, disfigurement or death.
Section 626.9541, Florida Statutes, protects consumers from an increase in their premium for filing a PIP claim in a not-at-fault accident.
Section 627.736, Florida Statutes, details who is covered under your PIP but there are many variables which ultimately determine how your policy will respond in a claim situation.
The following describes situations where coverage applies:
- Injuries to named insured:
- If the accident occurs in Florida, while occupying any defined motor vehicle or if struck by a defined motor vehicle while not occupying any self-propelled vehicle.
- If the accident occurs outside of Florida, while occupying the insured motor vehicle or a vehicle owned by a resident relative, if it is insured for PIP.
- Injuries to resident relatives of named insured:
- Covered the same as the named insured. For accidents outside of Florida, the named insured’s benefits apply to the relative only when the relative is occupying the named insured’s motor vehicle.
- Persons other than named insured and relatives:
- If the person is not an owner of a motor vehicle or entitled to benefits from another owner’s insurance company and if the accident occurs in Florida, the owner’s benefits are payable to such persons (1) while occupying the named insured’s motor vehicle or (2) if the person is a Florida resident, if struck by the insured’s motor vehicle while a pedestrian.
Standard PIP benefits required to be included on all Florida automobile policies include:
- 80 percent of all necessary and reasonable medical expenses incurred as a result of a covered injury, regardless of who caused the accident. It is very important to remember initial treatment must be received within 14 days of the accident to be covered. A limit of $2,500 applies to non-emergency medical treatment. If a medical doctor, an osteopath, a dentist, a physician’s assistant or an advanced registered nurse practitioner determines that the claimant suffered from an “emergency medical condition,” reimbursement for all services and care is up to $10,000, unless higher limits are purchased.An emergency medical condition is defined as: A medical condition manifesting itself by acute symptoms of sufficient severity, which may include severe pain, such that the absence of immediate medical attention could reasonably be expected to result in any of the following:
- Serious jeopardy to patient health;
- Serious impairment to bodily functions;
- Serious dysfunction of any bodily organ or part.
In addition to the standard benefits above, there are additional coverage options you may want to consider. You may increase medical expense coverage to 100 percent and lost wages coverage to 80 percent up to the policy limit. You may also increase the maximum coverage available to $20,000.
Not all insurance companies offer the increased limits discussed; however, all companies are required to offer deductibles and the option to exclude work loss. Section 627.739, Florida Statutes, states that insureds have the right to reject work loss benefits in exchange for a premium reduction. A rejection can apply to the insured only or to the insured and resident relatives. You may also choose a deductible of $250, $500 or $1,000. The deductible can apply to the insured only or to the insured and resident relatives. When a deductible is chosen, it applies to all benefits except the death benefit.
Coverage under PIP can be complicated. It is important to disclose to your agent or insurance company all the members of your household and any regular users of your vehicle when you initially purchase your policy and throughout the policy term, if members of the household and/or users change. Any special circumstances or concerns you have should be discussed with your agent or insurance company to determine how your policy will respond to a claim and what coverage options are more appropriate for your personal situation.
Medical Payments coverage is optional. It covers reasonable and necessary medical expenses and funeral expenses incurred as a result of bodily injury from an auto accident, not covered by PIP and up to the limit chosen. Medical Payments coverage applies to the named insured, resident relatives and others while a passenger in your insured vehicle. Also, Medical Payments coverage follows you and your resident relatives in any car or as a pedestrian or bicyclist. Some people purchase Medical Payments coverage to pay the 20 percent of medical expenses not covered under basic PIP or to pay the PIP deductible, if one was chosen.
Comprehensive or Other than Collision
Comprehensive, sometimes referred to as Other than Collision on your policy, provides coverage for damage to your insured vehicle from fire, theft, windstorm, vandalism, flood, falling objects or from colliding with an animal. When you have this coverage, windshield glass claims are not subject to a deductible. This coverage is usually available even if you elect not to purchase Collision coverage. Common deductible amounts are $250, $500 or $1,000. You should consult your agent or insurance company to determine what deductibles are available to you.
Collision coverage pays for the repair or actual cash value of your insured vehicle if it collides with another vehicle, flips over or collides with another object (except animals). Common deductibles are $250, $500 and $1000 and insurance companies normally require the purchase of Comprehensive/Other than Collision coverage in order to purchase Collision coverage.
In general, only equipment that is permanently attached to your vehicle is considered for coverage in a Collision claim. Tools and permanently attached tool boxes used in trade or a wheelchair lift or other custom features added by you or a dealer should be discussed with your agent or insurance company.
Rental Reimbursement is another optional coverage. Normally, this coverage is only available if you purchased Comprehensive and Collision. Rental Reimbursement provides coverage for the cost of renting a replacement vehicle in certain situations. In the event of a covered loss, your insurance company will reimburse you for car rental expenses up to the limits specified in your policy. Your insurance company is not responsible for rental reimbursement unless there is a covered claim that triggers the need for a rental car.
While some insurance companies may pay for your rental car in advance, eliminating the need for you to initially pay out of pocket, they are not required by law to do so. In fact, most contracts state that the insured must pay for the car rental in full and then submit the receipts to the insurance company for reimbursement.
Towing and Labor
Towing and Labor is optional and provides coverage for emergency road service (at the scene) and towing up to the limits shown on the policy. However, it is important to remember that frequent towing claims can affect your coverage in a negative way. Insurance companies have the right to cancel your policy for too many claims, even if they are low dollar towing claims not associated with an accident. Some policies settle towing claims on a reimbursement basis and others have contracts with preferred towing companies to provide the service.
Information courtesy of myfloridacfo.com.