Selecting the Right Insurance Coverage
All too often clients arrive at our office who have been injured in an accident thinking they have “full coverage” on their automobile only to find out that the coverage they have is something much less than full coverage. Many people reject certain types of coverage without realizing that they are rejecting very important coverage. To understand the type of insurance coverage you need, it is important to know what each type of insurance coverage provides.
No-Fault/PIP coverage and Property Damage liability coverage are the only coverages required by law. Many people purchase the basic insurance required by law thinking they are fully protected in the event of an accident. Nothing could be farther from the truth. Although No-Fault and Property Damage coverages are the only types required by law, they do not fully protect you in the event of an accident. In order to be fully protected, you should consider all of the insurance coverages explained below.
No-Fault/Personal Injury Protection Benefits
No-Fault Coverage, also commonly referred to as PIP coverage, covers the insured, the insured’s family members and certain others for bodily injuries resulting from automobile accidents, without regard to fault. Payments are for 80% of medical expenses, 60% for loss of income, replacement household services and a death benefit. The maximum amount of No Fault Benefits under the standard policy is $10,000.00.
No-Fault policies can be purchased with a deductible, most commonly a $2000.00 deductible. Seemingly, the vast majority of people select the deductible because it makes the insurance coverage cheaper. However, selecting a $2000.00 deductible can be very costly in that you become responsible for the first $2000.00 in benefits in the event that you are injured in an accident and incur medical expenses and/or wage loss.
Should you select a deductible? The answer is generally no. If you have group health insurance which will pay the first $2000.00 of your medical expenses, then you might consider taking the PIP deductible. Otherwise, unless you can afford to pay the first $2000.00 in losses if you are involved in an accident, you should not select the deductible.
At present, Florida law requires all vehicles to have the mandatory minimum of $10,000 of No-Fault PIP coverage.
Property Damage Coverage
Property Damage coverage covers the insured’s legal liability for damage to the property of others. If you are at fault in an accident which results in damage to another person’s property, the other person’s losses will be covered by your property damage coverage.
At present, Florida law requires all vehicles to have the mandatory minimum of $10,000 of Property Damage Liability coverage.
In order to have “full coverage” and be fully protected in the event of an accident, whether the accident is caused by you or another driver, it is important to have other insurance coverage which is not required under Florida law.
Bodily Injury Liability Coverage (Optional)
Bodily Injury Liability Coverage covers the insured’s legal liability for bodily injury to others. A surprisingly large number of people driving on the streets today do not have bodily injury liability coverage. Bodily injury liability coverage is an extremely important type of coverage to protect you in the event you are at fault in an automobile accident. If you have purchased bodily injury liability coverage, the insurance company will attempt to settle the claim with the other driver up to the limits of your insurance coverage (usually $10,000-$100,000.00 depending on the coverage you select). In addition, in the event a lawsuit is filed against you arising out of the incident, the insurance company must hire an lawyer to represent you. If you elect not to purchase this coverage, you are subject to being sued personally and will also have to incur expense to secure an lawyer to represent you.
Medical Payments Coverage (Optional)
As mentioned earlier, PIP covers 80% of medical expenses. Medical Payments Coverage supplements the medical expense reimbursement for PIP coverage and provides basic coverage in situations where PIP does not pay.
Uninsured Motorists Coverage (Optional)
Uninsured Motorist Coverage pays for bodily injuries to the insured, family members and certain others, resulting from the negligence of others. It pays when the at-fault party has no liability insurance or when the at-fault party has liability coverage which is not adequate to pay for the damages incurred. Uninsured Motorist coverage may also protect you if you are the victim of a hit-and-run accident. This coverage may be stacked or non-stacked. The principal difference between these two forms is that the total amount of protection under the stacked form is the sum of the limits applicable to each vehicle insured, whereas under the non-stacked form the limit stated applies per accident regardless of how many vehicles you own or insure.
A surprisingly large number of drivers on the road today do not carry liability insurance company. Purchasing uninsured motorist insurance coverage is the best way to protect yourself from uninsured drivers.
Collision Coverage (Optional)
Collision coverage covers damage to the insured’s car or replacement of the vehicle up to the actual cash value of the vehicle resulting from impact with another object. Typically collision coverage comes with a deductible of $250-$500.
Comprehensive Coverage (Optional)
Comprehensive coverage provides coverage for damage to the insured’s car resulting from fire, theft, vandalism and other hazards. Typically comprehensive coverage comes with a deductible of $250-$500.
It is important to access your automobile insurance needs before you are involved in an accident. After the accident has happened and you find out the other person doesn’t have insurance and you don’t have adequate insurance to protect yourself, it is too late.
Check your policy for coverage that you have and contact your agent to address your additional coverage needs.