Florida Auto Insurance: Lost Vehicle Coverage Explained

Florida has strict auto insurance requirements, and it's important to understand what is and isn't covered. In Florida, auto insurance follows the vehicle, not the driver, so if you lend your car to someone and they get into an accident, your insurance policy will be the primary coverage. If your car is stolen and an accident occurs, your insurance company will typically cover the damages to your vehicle, and you won't be responsible for the other party's damages. Florida is a no-fault state, which means that each person pays for their own accident expenses, regardless of who is at fault. The minimum requirements for auto insurance coverage in Florida are $10,000 for personal injury protection (PIP) and $10,000 for property damage liability (PDL).

Florida's No-Fault Insurance System

Florida is one of around a dozen states that follow a "no-fault" car insurance system. This means that after a car accident, your own insurance coverage pays for medical bills and other financial losses, regardless of who caused the accident. This coverage is called "personal injury protection" or "PIP".

Florida's no-fault system has its pros and cons. On the one hand, it ensures that injured drivers can quickly recover financial losses like medical expenses and lost income from their insurance companies, without having to determine who was at fault for the accident. This can speed up the process of obtaining compensation and avoid costly legal battles. Additionally, it provides coverage in situations where the other driver is uninsured or in a hit-and-run accident.

However, there are limitations to no-fault insurance. Compensation is limited to 80% of medical expenses and 60% of lost income, which may not be sufficient for extreme injuries or substantial time off work. Additionally, insurance premiums may increase after an accident, even if the policyholder was not at fault. There is also a lack of accountability, as determining fault is not a priority, which may result in the at-fault driver facing fewer consequences for their actions.

To file a claim under Florida's no-fault insurance system, injured drivers must have Personal Injury Protection (PIP) and Property Damage Liability (PDL) automobile insurance. PIP covers 80% of all necessary and reasonable medical expenses up to $10,000 resulting from a covered injury, regardless of who caused the crash. PDL coverage pays for damage to another person's property caused by the policyholder or someone driving their insured vehicle.

While Florida's no-fault insurance system covers medical expenses and lost income, it does not apply to vehicle damage claims. A separate liability claim can be made against the at-fault driver for damage to or total loss of a vehicle, with no limitations.

Personal Injury Protection (PIP)

Florida's no-fault insurance system requires all drivers to carry Personal Injury Protection (PIP) coverage as part of their auto insurance policy. PIP provides benefits for medical expenses and lost wages, regardless of who was at fault in the accident.

PIP coverage in Florida offers up to $10,000 in benefits for medical expenses and lost wages resulting from a car accident. It covers 80% of all necessary and reasonable medical expenses up to $10,000 resulting from a covered injury, no matter who caused the crash. This includes doctor's visits, medical exams, prescription medication, and diagnostic tests like X-rays or bloodwork. PIP also covers 60% of lost wages, subject to a $10,000 limit, and the costs of paying someone else for services you can no longer perform, such as daily chores or pet care.

In the event of the policyholder's death, PIP provides death benefits of up to $5,000 for funeral and burial expenses, in addition to the other benefits.

It's important to note that PIP claims must be filed within two weeks of a crash, and treatment for any injuries must occur within this timeframe to be eligible for reimbursement.

Florida residents must show proof of PIP coverage before registering a vehicle with at least four wheels in the state. The minimum requirement is $10,000 in PIP coverage, and it must be purchased from an insurance carrier licensed to do business in Florida. Continuous coverage is mandatory, even if the vehicle is not being driven or is inoperable.

Property Damage Liability (PDL)

It is important to note that PDL coverage does not extend to damages to your own vehicle or other personal property. If you want coverage for your own assets in the event of an accident, you will need to purchase additional insurance, such as collision coverage or comprehensive coverage. The cost of repairing or replacing your own vehicle in the event of an accident can be significant, so it is worth considering the benefits of having this extra coverage for added peace of mind.

The minimum PDL coverage required by law in Florida may not be sufficient to cover the cost of damages in a serious accident. If the damages exceed the amount of your PDL coverage, you may be held personally responsible for paying the difference. Therefore, it is advisable to consider purchasing additional PDL coverage to ensure you are fully protected. The amount of extra coverage you may need will depend on your budget, the value of your assets, and your driving history. If you have a history of accidents or traffic violations, for example, you may want to opt for higher coverage limits to protect yourself from financial liability.

PDL insurance provides drivers with a basic level of financial protection and ensures that all drivers are held financially responsible for any damage they may cause in an accident. While there are some limitations to this type of coverage, it is an important component of auto insurance in Florida and can help protect your assets in the event of a collision.

Bodily Injury Liability (BIL)

BIL insurance covers the following:

• Medical bills: Hospitalization, follow-up care, and related medical or healthcare costs for the other party.
• Lost wages: If the injured party is unable to work due to their injuries, BIL insurance compensates for their lost income.
• Legal fees: BIL insurance covers your legal defence if you are sued by the other party.
• Funeral costs: Pays for funeral and burial expenses if someone is killed in the crash.

BIL coverage limits are typically stated using a three-number format, such as "25/50/25." The first two numbers represent the bodily injury coverage limits per person and per accident, while the third number represents property damage coverage, a separate type of coverage. For example, a 25/50 limit means that the insurance policy will cover up to $25,000 per person injured in an accident and a total of $50,000 in claims for a single accident.

While most states in the US require BIL insurance, Florida is an exception. Florida is a no-fault state, meaning that each driver's own personal injury protection covers them in the event of an accident, regardless of who is at fault. However, it is still recommended that Florida drivers purchase BIL coverage as they can be sued for damages if they cause an accident.

Collision and Comprehensive Insurance

Collision Insurance

Collision insurance covers damage to your vehicle in the event of a collision with another vehicle or a stationary object, such as a telephone pole or guard rail. It also includes damage caused by potholes. Collision insurance will help pay for repairs or a full replacement of your covered vehicle, even if the accident was caused by an uninsured driver. This type of insurance is particularly important for drivers who are on the road frequently, as it offers protection against unforeseen accidents, regardless of who is at fault.

Comprehensive Insurance

Comprehensive car insurance, on the other hand, covers damage to your vehicle caused by non-collision events. This includes theft, vandalism, fire, natural disasters such as floods, hurricanes, and earthquakes, as well as contact with animals. For example, if a tree falls on your car during a storm or a deer jumps into your path, comprehensive insurance will provide coverage. Comprehensive insurance is ideal for drivers who live in areas with a higher risk of such incidents, such as regions prone to natural disasters or areas with a lot of wildlife.

While these coverages are optional in most states, they are highly recommended for all vehicle owners. The value of your car, the likelihood of accidents, and your current savings should all be considered when deciding whether to purchase collision and comprehensive insurance. If you have a high-value car, live in an area with a high risk of accidents or natural disasters, or don't have enough savings to cover unexpected repair costs, these coverages are essential. While you may never need to use them, accidents can happen anywhere, and having this protection can provide peace of mind and financial security.

Frequently asked questions