Florida Auto Insurance: Understanding The Basic Coverage Requirements

Florida is a no-fault state, which means that each driver's insurance covers injuries or medical expenses for themselves and their passengers, regardless of who is at fault. Florida law requires drivers to have a minimum of $10,000 in property damage liability insurance and $10,000 in personal injury protection (PIP) insurance. Property damage liability insurance covers damage to another person's property, while PIP insurance covers medical expenses and lost wages for the driver, up to a certain limit.

Personal Injury Protection (PIP)

In addition to medical expenses, PIP also covers lost income, child care, and funeral expenses related to the accident. For example, it can provide up to $2,000 per month for up to three years from the date of the accident to compensate for lost earnings. It can also reimburse other reasonable and necessary expenses, such as household help and transportation to medical appointments, for up to $25 per day for a year after the accident. Furthermore, PIP includes a $2,000 death benefit payable to the estate of a person who is killed in a motor vehicle accident and is eligible for PIP benefits.

It's worth noting that PIP has some exclusions. For instance, if a person is driving under the influence or impaired by drugs and contributes to the accident, they may be ineligible for PIP benefits, except for emergency health services. Other situations where PIP benefits may not apply include intentional self-harm, riding an ATV or motorcycle, committing a felony, being in a stolen vehicle, or owning an uninsured vehicle.

While Florida requires a minimum of $10,000 in PIP coverage, drivers can opt to purchase higher limits for added protection. This is particularly important in the event of significant injuries or death resulting from a car accident, as medical bills and other expenses can quickly exceed the minimum coverage amount.

Property Damage Liability (PDL)

In Florida, the minimum amount of PDL coverage required by law is $10,000 per accident. This means that if you are responsible for an accident that causes $10,000 or less in damages to another person's property, your insurance policy will cover the damages. However, it is important to consider that $10,000 may not be sufficient to cover the costs of a severe accident. If the damages exceed your PDL coverage, you may be held personally responsible for paying the difference. As a result, many drivers opt to purchase additional PDL coverage to ensure they are fully protected.

When determining how much PDL coverage is needed, it is recommended to take into account factors such as the value of your assets, your budget, and your driving history. If you have significant assets, such as a home or other valuable property, purchasing additional PDL coverage can provide peace of mind and financial protection in the event of an accident. Additionally, if you have a history of accidents or traffic violations, higher PDL coverage can safeguard you from financial liability.

PDL insurance in Florida offers several advantages. Firstly, it is a legal requirement, ensuring that all drivers are financially responsible for any damage they may cause in an accident. Secondly, PDL coverage is often affordable, making it accessible for drivers to comply with the state's insurance mandates. Lastly, it provides protection for your assets, covering a wide range of property types and ensuring you are financially responsible for any damage caused.

However, there are also a few disadvantages to consider. PDL coverage is limited to damages incurred by someone else's property, and it does not extend to injuries sustained by you or your passengers. Furthermore, the minimum PDL coverage of $10,000 may not be sufficient for serious accidents, leaving you financially liable for any excess amount.

Bodily Injury Liability (BIL)

BIL policies have limits on how much will be paid per person injured and per accident. The coverage is usually stated in a three-number format such as "25/50/25." In this format, the first two numbers represent the bodily injury coverage limits, and the third number represents the property damage coverage limit. For example, a policy with 25/50 bodily injury coverage limits will cover up to a maximum of $25,000 per person injured in an accident and a total of $50,000 in claims for a single accident.

While most states require bodily injury liability coverage, Florida does not. However, Florida drivers can still benefit from adding BIL coverage to their auto insurance policies. It is generally recommended to have BIL coverage of $100,000 per person and $300,000 per accident, although some states require higher or lower minimums.

Uninsured/Underinsured Motorist Coverage

Understanding Uninsured Motorist Coverage

Uninsured motorist coverage is designed to protect you if you're involved in an accident with a driver who doesn't have auto insurance. This type of coverage is especially important in Florida, where nearly 1 in 5 drivers were uninsured in 2019. Without this coverage, you could be left paying for medical bills and vehicle repairs out of your own pocket if the other driver is uninsured. Uninsured motorist coverage typically includes:

• Uninsured Motorist Bodily Injury (UMBI): Covers medical bills for you and your passengers if you're hit by an uninsured driver.
• Uninsured Motorist Property Damage (UMPD): Covers damage to your vehicle caused by an uninsured driver.

Understanding Underinsured Motorist Coverage

Underinsured motorist coverage, often offered alongside uninsured motorist coverage, protects you if you're in an accident with a driver whose insurance coverage is insufficient to pay for the damages or injuries they caused. This is crucial in Florida, where the minimum property damage liability coverage is only $10,000. Underinsured motorist coverage typically includes:

• Underinsured Motorist Bodily Injury (UIMBI): Covers medical bills for you and your passengers if the at-fault driver's coverage is insufficient.
• Underinsured Motorist Property Damage (UIMPD): Covers damage to your vehicle if the at-fault driver's coverage is insufficient.

Benefits of Uninsured/Underinsured Motorist Coverage

• Protection against financial loss: This coverage ensures that you're not left paying out of pocket for medical expenses or vehicle repairs if the other driver doesn't have enough insurance.
• Coverage for hit-and-run accidents: In Florida, you can file a claim against your uninsured motorist coverage if you're a victim of a hit-and-run accident.
• Peace of mind: With this coverage, you can rest assured that you're protected in the event of an accident with an uninsured or underinsured driver.

Optional but Highly Recommended

While Florida doesn't mandate uninsured/underinsured motorist coverage, it is highly recommended for all drivers. In the event of an accident with an uninsured or underinsured driver, this coverage can provide valuable financial protection and help ensure that you and your passengers receive the medical care you need.

Collision and Comprehensive Insurance

Collision Insurance

Collision insurance covers damage to your vehicle resulting from a collision with another vehicle or object, regardless of who is at fault. This includes situations such as colliding with another car, a tree, or a guardrail, as well as single-car accidents. Collision insurance will cover the cost of repairs or replacement of your vehicle, but it is important to note that it does not cover damage to another person's vehicle or property—that would be covered by property damage liability insurance. Collision insurance policies usually include a deductible, which is the amount you will have to pay out of pocket before the insurance coverage kicks in. The deductible amount can vary, and choosing a higher deductible can lower your insurance charges. Collision coverage also usually has a total limit, which is the maximum amount the insurer will pay, often the "actual cash value" of your vehicle at the time of the accident.

Comprehensive Insurance

Comprehensive insurance, on the other hand, covers damage to your vehicle caused by something other than a collision. This includes situations such as vandalism, theft, falling objects, natural disasters, civil disturbances, and damage caused by animals. Like collision insurance, comprehensive insurance will cover the cost of repairs or replacement of your vehicle, but it does not cover collisions with other vehicles or objects. Comprehensive insurance is especially important if you live in an area with a high rate of crime or natural disasters, or if you have a vehicle that is commonly targeted by thieves.

When to Get Collision and Comprehensive Insurance

While not legally required, collision and comprehensive insurance are highly recommended, especially if you have a newer or more expensive vehicle. If you are still making payments on your car through a loan or financing agreement, your lender will likely require you to have both types of coverage. Collision and comprehensive insurance can provide valuable protection against financial losses in the event of an accident or damage to your vehicle. Without this coverage, you could be left facing high repair or replacement costs.

When to Drop Collision and Comprehensive Insurance

You may consider dropping collision and comprehensive insurance if your car is older and has a low value, or if you have the financial means to pay for repairs or a new vehicle out of pocket. If the cost of these insurance premiums is more than 10% of your car's actual cash value, it may not be worth keeping the coverage. However, it is important to weigh this against the risk of being unable to afford repairs or a new vehicle if an accident occurs.

Frequently asked questions