Leasing A Vehicle In Florida: Insurance Laws

Florida has specific laws regarding car insurance, and it's crucial to understand them, especially if you're leasing a vehicle. Florida is a no-fault state, which means that drivers are required to hold both Property Damage Liability (PDL) and Personal Injury Protection (PIP) insurance. When leasing a car in Florida, you must comply with the state's minimum insurance requirements, including PDL and PIP, but also consider the leasing company's requirements, which often include comprehensive and collision coverage.

Florida's mandatory insurance coverage

Florida requires all car owners, including those who lease their vehicles, to carry two types of auto insurance. These are:

No-Fault Insurance/Personal Injury Protection (PIP)

This covers 80% of all necessary and reasonable medical expenses up to $10,000 resulting from a covered injury, no matter who caused the crash. PIP also covers you if you are at fault in a crash, up to the limits of your policy.

Property Damage Liability (PDL)

This pays for damage to another person's property caused by you or someone else driving your insured vehicle. PDL coverage must be a minimum of $10,000, but vehicles registered as taxis must carry PDL coverage of $50,000.

Florida is a no-fault state, which means that each driver's insurance covers injuries or medical expenses for them and their passengers, regardless of who is at fault.

Beyond the mandatory PIP and PDL coverage, all other coverages are optional under Florida law. However, it is recommended that drivers also consider purchasing bodily injury liability (BIL) coverage, which pays for injury or death to others. Although Florida does not require BIL coverage, it is considered wise to add this protection in case you are sued for damages.

Other types of optional auto insurance coverage include collision insurance, which covers damage to your own vehicle, and comprehensive insurance, which covers auto theft, acts of nature, and other accidents outside of vehicle collisions.

It is important to note that Florida requires you to carry proof of insurance with you whenever you drive and that it must be current. If you are pulled over or in an accident, law enforcement will ask to see this proof.

Additional insurance options

When leasing a vehicle in Florida, you are required by law to carry two types of auto insurance: No-fault insurance, also known as Personal Injury Protection (PIP), and Property Damage coverage. Beyond these, all other coverages are optional, but you may want to consider additional insurance options for more comprehensive protection. Here are some additional insurance options to consider when leasing a vehicle in Florida:

• Extended PIP: While the basic PIP coverage will help cover your medical expenses up to a certain limit, you may want to consider extended PIP for more comprehensive protection. This can provide additional coverage for medical expenses and lost wages in the event of an accident.
• Additional Medical Payments Coverage: This optional coverage can help pay for any medical expenses that exceed your PIP coverage limits. It is especially useful if you anticipate needing extensive medical care or if you have passengers who may not have their own insurance.
• Bodily Injury Liability Coverage: While not required by Florida law, Bodily Injury Liability coverage can protect you if you are at fault in an accident. It covers the medical expenses of other people injured in the accident, which can help protect you from financial liability.
• Uninsured/Underinsured Motorist Coverage: Considering that Florida has a high number of uninsured drivers, this coverage can protect you if you are in an accident with a driver who does not have insurance or does not have sufficient coverage. It covers your medical expenses and property damage in such situations.
• Collision Coverage: This type of coverage pays for damage to your leased vehicle resulting from a collision with another vehicle or object. It is often required by leasing companies and provides protection in case of accidents.
• Comprehensive Coverage: Comprehensive coverage pays for damage to your leased vehicle that is not caused by a collision. This includes events such as theft, vandalism, natural disasters, or damage from falling objects. It is another type of coverage often required by leasing companies.
• Gap Insurance: This coverage is specifically designed for leased vehicles and covers the difference between the amount you owe on the lease and the actual value of the vehicle if it is totaled or depreciates rapidly. It can help you avoid making payments on a vehicle that is no longer usable.

Remember that while some of these additional insurance options may not be required by Florida law, they can provide valuable protection and peace of mind. It is important to carefully review the terms of your lease and understand the specific requirements and recommendations of your leasing company.

Bodily injury liability

When leasing a vehicle in Florida, you are required to carry auto insurance. While Bodily Injury Liability (BIL) insurance is not mandatory in Florida, it is a common requirement for leased vehicles. BIL insurance covers injury or death to others when your car is involved in an accident and the driver of your car is found to be at fault. This policy also covers legal defence costs if you are sued.

In Florida, the minimum BIL coverage required is $100,000 per person and $300,000 per accident. These limits may be higher depending on the requirements of your leasing company. For example, leasing companies often require a minimum of $100,000 of BIL coverage per person and $300,000 per accident. Some companies may require even higher limits, such as $125,000 per person and $250,000 per occurrence for taxis.

It is important to note that BIL insurance does not cover injuries to the policyholder or their passengers. Instead, it covers the injuries and legal defence costs of others involved in an accident when the policyholder is at fault. This type of insurance is designed to protect you from financial loss in the event of a lawsuit resulting from an accident.

In addition to BIL insurance, you will also need to carry Personal Injury Protection (PIP) and Property Damage Liability (PDL) insurance in Florida. PIP insurance 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 insurance covers damage to another person's property caused by you or someone driving your insured vehicle.

When leasing a vehicle, it is important to carefully review the requirements of your leasing company and the laws of Florida to ensure you have the necessary insurance coverage.

Property damage liability

In Florida, drivers are required to have Property Damage Liability (PDL) insurance, which pays for damage to another person's property caused by the insured vehicle. The minimum PDL coverage in Florida is $10,000 per accident, though this may vary depending on the vehicle. For example, taxis in Florida must have a minimum PDL coverage of $50,000.

When leasing a vehicle in Florida, you are required to have PDL insurance. The leasing company will be listed as an additional insured and loss payee on your insurance policy, meaning they will receive any insurance payouts for damage to the vehicle. Leasing companies often require a full-coverage insurance policy, which includes PDL coverage. This is to cover any damage to the leased vehicle, and the PDL coverage required may be higher than the state minimum. For example, it is common for leasing companies to require $50,000 in PDL coverage.

In Florida, PDL insurance covers damage to another person's property, not the leased vehicle itself. Collision coverage pays for damage to the leased vehicle resulting from a collision with another vehicle or object, while comprehensive coverage pays for damage to the leased vehicle not caused by a collision, such as theft, vandalism, or natural disasters. These coverages are often required by leasing companies and can provide protection in the event of an accident.

It is important to note that the minimum PDL coverage required by the state of Florida or the leasing company may not cover all the costs resulting from an accident. Selecting higher PDL limits can increase your protection and help cover any potential costs.

Gap insurance

For example, if you owe $25,000 on your loan and your car is only worth $20,000, gap insurance will cover the $5,000 gap, minus your deductible.

In Florida, you can buy gap insurance from your lending company, the dealership where you purchased or leased the car, or your auto insurance company. It is recommended that you start by getting a quote from your insurer, as they will often offer the best rates. The cost of gap insurance from your insurer may be as low as $5 per month, whereas a gap waiver from a dealership will often cost a few hundred dollars.

When shopping for gap insurance, it is important to compare quotes from multiple insurers and understand the details of each policy before choosing one. Some insurers may impose certain limitations, such as restricting the amount of gap coverage based on the value of the car or requiring that you purchase other forms of insurance. Not all insurers will consider your deductible as part of the "gap" and therefore won't pay it. Additionally, some insurers may require your car to be within a certain model year range or have a minimum value to qualify for gap insurance.

Frequently asked questions