Many times we hear people speak of full coverage auto insurance. But what does that really mean? Insurance companies are business and their business is to sell you a product and make money. Like many smart business owners, insurance companies know that one of the primary considerations their potential customers take into account when they are considering making a purchase is the price. If I tell you that I can “fully cover” you for less money than the next insurance agent, you’re likely to buy from me rather than the other agent. So when an agent quotes you the price for full coverage they are often talking about the minimum requirements under the law.
Florida is a state that actually has very limited requirements for automobile insurance. You have to have insurance to drive, but it really doesn’t have to cover much. Legally you are required to have Personal Injury Protection (PIP) in the amount of $10,000 and Property Damage Liability of $10,000. That’s it. That’s all the law requires, so many people think this is “full coverage”. Well, what do you get if this is all you have? The PIP coverage will pay a total of $10,000 to you and your passengers, regardless of fault, for a portion of your lost wages, mileage, and medical care. The medical care payments go directly to the hospitals and doctors who treat you. Although the payments are made at an adjusted rate,
that really isn’t much money. The initial hospital bills alone could exhaust the entire $10,000, and then there’s no money left over for your lost wages or for additional medical/chiropractic treatment for you or your passengers. Well, what about the other $10,000 in property damage liability? What does that cover? That insurance only pays for damage to the other party’s vehicle and other property. And even then, only up to $10,000. If you total somebody’s brand new car, your minimal liability insurance won’t fully cover the cost. What is not covered with this liability insurance is damage to your own vehicle or property. If you seriously damage your own car in the accident, you may end up with no money to fix or replace your car. Being in a serious accident with minimal “full coverage” insurance can be a nightmare that you never recover from.
So what insurance should you have if the legal minimum isn’t very much? The simple answer is that you should have as much as you can afford to reasonably protect you if you are unlucky enough to be in a serious crash whether you’re at fault or not. So what other insurance should I consider?
One of the primary types of insurance coverage you should have in Florida is referred to as Bodily Injury (or BI) coverage. This type of insurance protects you from being sued personally for the injury you cause to other people while you’re driving. If you rear-end somebody at a stoplight, even low-speed collision can lead to cervical disc herniations and neck surgery. Those surgeries are expensive.
Another type of coverage you should seriously consider purchasing is collision insurance coverage. Your liability and BI insurance are not going to pay for repairs to your car. If you are making payments on a car, the lender may require you to carry collision insurance just to protect their interest. They don’t want you to wreck a $50,000 car, that you owe $40,000 on unless you have a way to make the lender whole. But even if you own your car outright, you may still want to have collision insurance depending on your car’s value. Maybe you don’t get collision if you are driving an old clunker that you have money in the bank to replace. Otherwise, it’s money well spent.
Not all losses to your vehicle are accident-related. Cars catch on fire and burn. They can be stolen, vandalized, or storm damaged. Your car could hit or be hit by a boulder or large animal. Insurance that will cover occurrences like these is called comprehensive insurance. Comprehensive insurance coverage can vary dramatically from one policy to another. Make sure you read your policy or talk to an agent to know what your policy covers.
What happens if the person who causes the accident (the other driver who isn’t paying attention) don’t have insurance or has the bare minimum that the law requires? If you’re in a state like Florida that has such low minimum levels of insurance, you really need protection from the uninsured or underinsured driver. Not surprisingly, this is called UM (uninsured/underinsured) coverage. Your own insurance company will pay for your injuries if the other party doesn’t have sufficient insurance to cover the damages they have caused. Your UM coverage will also protect you if the person who runs into speeds away, and you’re unable to get their insurance information.
Finally, let’s assume that life has been financially good to you. You’ve worked hard all your life and saved your money just like you’ve been advised that you should. If you fall into that category, then you really aren’t going to be fully insured unless you have an “umbrella” policy. Just like it sounds the umbrella policy shields you from all sorts of liability. Some people who get above the minimum insurance will have UM and BI and liability coverage with limits of $100,000, $250,000, or $500,000. While that sounds like a lot of money, and it is, there are situations where that isn’t adequate. If you’re being sued because somebody is alleging that your negligence led to the death of another, or even paralysis, verdict a can be well in excess of $1,000,000. Without umbrella insurance, the assets you have can be seized to satisfy such a large verdict.
So you see, that what is meant by full coverage can vary from one situation to another. Obviously, many people can’t afford to pay for more than the very minimum that Florida requires. But if you can afford to pay for more, you should. Your car is a substantial asset that should be protected, but vehicles are also capable of causing serious injury or death. Failure to be true “fully insured” just compounds the injury.
At Trial Pro, one of the very first things we do in an automobile accident case is chased down all the insurance that may be available to protect you and compensate you for your injury. If you’ve been in an auto accident of any sort, contact us immediately. Quick action can make all the difference!
