Automobile Insurance In Florida

What is the Minimum Coverage Required?

The minimum amount of auto insurance coverage needed to obtain a Florida license plate and vehicle registration is $10,000 dollars in Property Damage Liability (PD) and $10,000 dollars in Personal Injury Protection (PIP). PD protects property owned by someone else that is damaged by your vehicle. Examples might include another vehicle, a stop sign, or a building. PD liability will never pay for physical injuries. PIP is sometimes called “No-Fault Coverage” and ensures the physical injuries you and certain other people in your vehicle sustain in an accident are covered, regardless of who is at fault in an accident.

The Florida Financial Responsibility Law states that any person who is at fault in an accident that causes bodily injury and property damage to another party must also have Bodily Injury Liability coverage (BI) totaling $30,000 in addition to the PIP and PD limits listed above. You may choose either split or single limit coverage as long as the total coverage amount is $30,000 dollars. For example, both $10,000/$20,000 (per person/per accident) split limits or a $30,000 combined single limit would be acceptable. In some instances, the law may require certain drivers to carry higher limits of liability. Drivers convicted of driving under the influence of drugs or alcohol must provide proof of BI coverage in the amount of $100,000/$300,000 (per person/per accident) and $50,000 in PD liability.

Any individual who is in the State of Florida with their vehicle for more than ninety (90) days in the last 365 days is responsible for carrying these minimum limits of coverage. It is important to note the ninety (90) days do not need to be consecutive in order for the law to apply. The Florida Department of Highway Safety and Motor Vehicles regulates the statutes outlined above.

Bodily Injury Liability (BI)

This coverage will pay for death or physical injuries caused to someone else if you are found legally liable for an auto accident. As the owner of a vehicle, anytime an accident occurs involving your insured vehicle (whether or not you are driving), the possibility exists that you may be held financially responsible for any damages. When referring to BI limits of liability, the first number represents the maximum amount your insurance company will pay to each individual injured in a given accident and the second number is the maximum amount that will be paid for all individuals injured in that accident.

Making a decision about the amount of coverage you should carry is a personal decision based on many factors. Discussing your coverage needs with a qualified insurance agent can help you better understand your options. It is important to remember that if an accident occurs, and the injuries sustained by another party are beyond the limits of your insurance policy, the injured party has the right to pursue recovery from you through the court system.

Property Damage Liability (PD)

PD liability pays for damage to another person’s property caused by you or someone else operating your insured vehicle. Most often this coverage will be used to repair the other automobile(s) involved in an accident with your insured vehicle. It can also be used to pay for damage to street signs, mailboxes, buildings or other property owned by another party.

Uninsured/Underinsured Motorist (UM)

This coverage is optional but provides some important benefits to you and other people in your insured vehicle who sustain injuries in an accident caused by an uninsured or underinsured motorist. The coverage works in conjunction with your mandatory PIP coverage to pay for additional medical expenses, lost wages, pain and suffering and other expenses that might arise when an injury is sustained. Once coverage has been triggered, benefits will be paid directly to the injured person to be used in any manner they deem necessary.

You may wonder why you might need to carry UM coverage if you have PIP and health insurance since after your PIP coverage is exhausted your health insurance will pay your remaining medical bills. You may still face your health insurance deductible, co-payment, and other expenses that health insurance will not cover. In some cases where an injury is severe, permanent or requires a longer recovery time it can be very important to your quality of life and financial health to have coverage that will continue to pay for lost wages, services now required like lawn maintenance or housekeeping, pain and suffering, or modifications made necessary due to your injury like a wheelchair ramp.

After you make the decision to carry UM you will need to choose the limits of your coverage and decide whether or not you would like to carry stacked or non-stacked coverage. You may choose to carry limits that either match or fall below your BI limits but may not carry UM limits that are higher than your BI limits. All insurers are required to offer stacked UM coverage. Some insurers will also offer the option to carry non-stacked UM limits but are not required by law to do so. Stacked UM coverage means that the UM limits will increase by the number of vehicles you own, regardless of whether or not they are insured on the same policy. If you chose stacked UM limits of 50/100 and own three vehicles your actual coverage amount is three times higher or 150/300. If you elect non-stacked UM at 50/100 that would be the maximum coverage amount regardless of how many vehicles you own. One other important coverage difference between the stacked and non-stacked option is how the policy will respond if you are injured by an uninsured/underinsured motorist in a vehicle you own but that is not covered for UM under that policy.

Personal Injury Protection (PIP)

You will often hear Florida referred to as a “No-Fault State.” This means that anytime you are involved in an accident you will file a claim on your own policy for any physical injuries sustained, regardless of who is at fault. However, once an injured person reaches the tort threshold they may seek recovery for costs not duplicated by PIP from the at-fault party.

Florida Statute 627.737 states that the threshold has been crossed when an injury from a car accident results in significant and permanent loss of important body function, permanent injury, significant or permanent scarring, disfigurement or death.

Florida Statute 626.9541 protects consumers from being penalized for filing a PIP claim in a not-at-fault accident.

Florida Statute 627.736 details who is covered under your PIP coverage but there are many variables which ultimately determine how your policy will respond in a claim situation.

For example, if you are involved in an automobile accident while in Florida your PIP covers you and members of your household who do not own a vehicle of their own, certain passengers who lack PIP, and certain licensed drivers who operate your vehicle with your permission. This coverage also follows you in Florida while you are a passenger in another person’s vehicle or as a pedestrian or bicyclist. For accidents occurring outside of Florida, but within the United States or Canada, you and other members of your household are covered under your PIP only while operating your own vehicle or a resident relative’s vehicle.

In addition to the standard benefits above, there are some additional PIP coverage options you might choose to purchase. Examples are increased medical expense coverage at 100 percent, 80 percent of lost wages (up to the policy limit), and increased limits from $10,000 to $20,000 or more.

Not all insurance companies will offer the increased limits discussed above; however, all companies are required to offer deductibles for PIP and the option to exclude work loss. Florida Statute 627.739 states that insured’s have the right to reject work loss benefits in exchange for a premium reduction. This rejection can apply to the insured only or to the insured and dependent relatives living at their residence. You may also choose to carry a deductible of $250, $500 or $1000 for your PIP coverage. The deductible may apply to only yourself, or to yourself and other members of your household. It is important to remember that if a deductible is elected all PIP benefits are subject to that deductible, except the death benefit.

PIP coverage can be complicated. It is important to inform your agent or insurer of all members of your household and regular operators of the vehicle both when you initially purchase your policy, and throughout the policy term as household members change. Any special circumstances or concerns you have should be discussed with your agent or company in order to best determine how your policy will respond during a claim and what coverage options make the most sense for your personal situation.

Medical Payments

This coverage is optional and pays for reasonable expenses incurred for necessary medical and/or funeral services not covered by PIP because of bodily injury caused by an auto accident. This coverage can be used by you, family members in your household, or passengers in your insured auto and is paid regardless of fault. This coverage follows you and your resident relatives whether you are injured in your own automobile, in another person’s vehicle or as a pedestrian or bicyclist. Medical Payment coverage can be used to pay the 20 percent not covered under your PIP coverage or in some cases, the PIP deductibles you have chosen.

Comprehensive or Other than Collision

This is another optional coverage that protects your insured vehicle against damage from fire, theft, windstorm, vandalism, flood, falling objects or from hitting an animal. With this coverage, windshield glass claims are not subject to a deductible. This coverage is usually available even if you elect not to carry Collision coverage. Common deductible amounts are $250, $500, or $1000. You should check with your agent or insurer to determine what deductible options are available to you.

Collision

Collision coverage pays for the repair or actual cash value of your insured vehicle if it collides with another vehicle, flips over, or crashes into an object (except animals).  In general, only equipment that is permanently attached to your vehicle is considered for coverage in a Collision claim. Tools and permanently attached tool boxes used in trade or a wheelchair lift or other custom features added by you or a dealer should be discussed with your agent or insurer.

Rental Reimbursement

You may choose to carry rental reimbursement on your insured vehicle if you also have Comprehensive and Collision coverage on that vehicle. In the event of a covered loss, your insurer will reimburse you for car rental expenses up to the limits specified in your policy contract. Your insurance company is not responsible to pay for a rental vehicle unless there is a covered claim that triggers the need for a rental car.

While some insurers may pay for your rental car in advance, eliminating the need for you to pay out of pocket initially, this is a courtesy to you as a policyholder and they are not required by law to do so. In fact, most policy contracts state that the insured must pay for the car rental in full and then submit the receipts to the insurer for reimbursement.

Towing

Towing and Labor Coverage can be elected on your personal automobile insurance policy. It provides coverage for emergency road service (at the scene) and towing up to the limits shown on the policy. However, it is important to remember that frequent towing claims can affect your coverage in a negative way. Insurance company’s have the right to cancel your policy for too many claims, even if they are low dollar towing claims not associated with an accident. Some policies pay on reimbursement bases only while others will send out a contracted towing company.

Financed Vehicle

Most loan agreements require you to maintain Comprehensive and Collision coverage for the term of the loan and to list the lender as a loss payee on the policy. This protects the financial interests of the lender and also guarantees that the lender will receive notification anytime the policy is changed or is pending cancellation. Some lenders offer insurance coverage issued by a specific insurer but they cannot require you to buy insurance from a particular company, agent or lender. They can however limit the amount of the deductible you can choose. As with any contract, it is important that you understand the terms of your loan agreement and your responsibilities as a party to the contract before signing it.

If you do not maintain the coverage specified in your loan agreement, the lender has the right to buy insurance to protect its interests. It is important to understand that when the lender purchases force placed coverage they are considered the insured on the policy and you have no protection or rights to recovery under the policy. This means that if there is an accident and you or a driver of your vehicle is found at fault, you can be held legally liable for the damages. In addition, force placed policies typically do not meet the requirements for coverage dictated by the Department of Highway Safety and Motor Vehicles. In addition, the cost of the force placed policy will be passed on to you and may increase the number and/or amount of your monthly payments. Generally, you pay less when you buy your own coverage. You should keep coverage records until you pay off your debt and receive the title. Keep proof of coverage in your automobile, since you may need it at any time.

Leased Vehicle

Florida Statute 324.021 requires you to carry higher limits of coverage if you are under an agreement where you will lease a vehicle for one year or longer. The requirements are that you must carry BI limits of $100,000/$300,000 and $50,000 PD or a combined single limit of $500,000. You should also carefully review the lease agreement to identify any additional requirements that are part of the contract between you and the lessor.

Motorcycles

A special policy is required for motorcycles which can not be added to an existing auto policy. Most of the coverage offered on an auto policy can also be purchased on your motorcycle policy; however, PIP is not available to purchase. Since PIP is only required for self-propelled vehicles with four or more wheels registered or licensed in Florida, motorcycles do not fall under the requirements of the PIP law.

Oftentimes, the most expensive coverage to purchase when insuring a motorcycle are the ones that insure you or a passenger against physical injuries; namely medical payments or uninsured/underinsured motorist coverage. It is important to understand that if you elect not to carry these coverages, your PIP will not extend from your auto policy to cover you. The other party may or may not have adequate coverage if they are at fault. This means your health insurance, if you have it, will be primarily responsible for your medical bills.

Florida law allows motorcycle drivers 21 and older to operate or ride a motorcycle without wearing protective headgear as long as they have at least $10,000 in appropriate health insurance or medical payments coverage. Drivers or passengers who are under the age of 21 are required by law to wear a helmet. Many motorcycle owners or dealers make modifications or customize their bikes in some way. Be sure to check with your agent or company representative to be certain that your policy will cover these additional features. In some cases, a separate endorsement may be required.

Vehicle Used for Work

A personal auto policy typically will not provide coverage for a vehicle being used for business purposes. It is critical that you discuss any business use of your vehicle with your agent to determine if coverage can be extended via endorsement or if a new policy needs to be issued. Each insurer will have their own underwriting guidelines and what is acceptable for one company may not be acceptable by another. The details of your specific situation must be evaluated to ensure you have the appropriate coverage in place. Failing to do so can result in coverage being denied if an accident occurs and policy cancellation for misrepresentation.

Renting a Vehicle

It’s best to check with your agent or company representative prior to renting a vehicle to determine if your auto policy coverage will transfer to the rental vehicle. What kind of vehicle you rent, how it will be used, where it will be driven, and the limits of your own coverage are all factors that determine if coverage will extend from your personal auto policy to the rental vehicle.