When I started at Trial Pro as a paralegal in Personal Injury law, the first thing I did after learning the ropes was to check my auto insurance policy. Luckily, I was well covered, mainly because my car was previously leased and the lien holder required high policy limits in order to protect their interests and I stuck with the same coverage when I purchased the car.
When I think back to the many cars I’ve had over the years, and the insurance coverage I’ve purchased, I do not recall an insurance agent explaining auto insurance coverage to me, not even one time. I just basically winged it, letting the agent sell me their goods, not really knowing what I was buying. There’s collision, PIP, bodily injury, property damage and uninsured/underinsured motorist coverage, That’s the one where they send you that piece of paper to sign, which is required by Florida law, where you elect to have or not to have that coverage and if you want it, you can have it “stacked” or “non-stacked.” Well, I’m here to tell you that it is really in your best interest to learn about the fundamentals of auto insurance coverage and to strongly suggest that you pull out your policy that you keep renewing every year without really knowing what you’ve got. This stuff is really important and it was truly in my best interest to gain some knowledge on the topic.
We’ll just cover the basics here and I’ll give you the Reader’s Digest version so as not to overwhelm you. PIP, or Personal Injury Protection insurance, is mandatory in Florida. If you have an operable car, you must have auto insurance, and PIP is automatic. PIP is no fault insurance and covers up to $10,000 of your medical bills if you are in an auto accident. This coverage infuriates most people after they get into an auto accident and learn that they must use their own insurance coverage to cover their own medical expenses. “Huh, what about the guy that hit me? Why doesn’t he have to pay my bills?” Well, in a sense he does, but that’s a policy limit question that we’ll get to shortly. So that’s why they call it “no fault.” You will not be penalized and your insurance company can’t increase your rates, by law, if you need to utilize your PIP coverage. And you get to use it regardless of who is at fault in the accident.
Bodily Injury coverage or “BI” is what you are praying for that the other guy has if you get into an auto accident. Unfortunately, BI is not mandatory in Florida. So if you get into an accident, you may get a portion of your bills paid for through PIP, through your own insurance company, but if you are seriously injured, you are pretty much going to be in a major jam medially & financially. Personal Injury claims are pretty much about policy limits. No coverage, no claim.
As for “UM” coverage, this is uninsured/underinsured motorist coverage insurance and it is totally elective, your choice, whether you wish to purchase it. It is really startling how many people are driving around without any auto insurance coverage in Florida. The cost of UM is minimal compared to what you could lose, so it is worth looking into if it is not currently on your policy. This coverage will protect you in the event of a hit and run accident, (uninsured coverage) or when the offending party has low coverage and your injuries are serious (underinsured coverage).
My suggestion is to pull that policy out of your desk drawer, dust it off and start asking some questions. Don’t get yourself into a major bind just because of an oversight or not being fully informed.