Understanding the Basics of Auto Insurance in Florida

Understanding the Basics of Auto Insurance in Florida

If there’s one thing that’s almost universal in our experience as lawyers, it’s this: clients don’t understand how their auto insurance really works. Even highly educated, financially prudent people are typically bewildered by the interaction between various parts of their Florida auto insurance coverage. This isn’t surprising, because it really is difficult to understand all the moving parts in this system.

To help you better understand Florida auto insurance and the important role it plays following car accidents, we’ve detailed some the basics below.

No-Fault Coverage & Personal Injury Protection (PIP)

Part of the problem is that Florida is still a “no fault” state. While most people think the at-fault driver’s insurance should pay for their medical bills and lost wages, that’s not initially how it works. Under no-fault coverage, or “personal injury protection” (PIP), medical bills, lost wages, and other expenses get paid for by the injured person’s own coverage. Under Florida law, no-fault insurance pays medical bills even before a person’s health insurance.

This flies in the face of common sense for most people. They understandably find it frustrating that their own coverage foots the bill when someone else hurts them through bad driving behavior. Partly for that reason, many reformers have called for repeal of Florida’s no-fault law and its replacement with a fault-based insurance scheme. So far, the insurance industry and other interest groups have thwarted those efforts. Thus, at least for the moment, no fault is the system we’ve got.

Uninsured / Underinsured Motorist Coverage (UM / UIM)

Every Florida auto policy for Florida vehicles has no-fault coverage. It is by no means, though, the only important coverage for Florida drivers. For years, we have urged our clients and the public to buy an additional coverage called “uninsured motorist” coverage. This coverage, as the name implies, protects you if an uninsured driver, underinsured driver, or hit-and-run driver causes an accident and hurts you.

In a perfect world, everyone driving would carry enough coverage (known as “bodily injury liability”) to compensate people for any mistakes they make. Unfortunately, that’s not reality. Many drivers - most estimates are in the neighborhood of 25 percent - don’t carry coverage for crashes where they cause injury to others. And even those who do may not have enough insurance to fully cover the damages and catastrophic injuries caused by a serious accident.

Thus, the only way to protect yourself from negligent drivers is to buy uninsured motorist coverage. This coverage, referred to by people in the industry as “UM,” kicks in when the at-fault driver has no coverage, or inadequate coverage to cover your damages. Every driver with a Florida auto insurance policy has a chance to buy UM coverage, and you get it automatically unless you specifically decline it and sign a waiver.

UM also protects you when you’re not driving. UM coverage is available to people struck by cars while they are walking or riding bicycles. As long as the accident is caused by another car, the coverage still applies. UM coverage would protect you, for example, if you were struck by an errant car while sitting at a bus stop. It protects against hit-and-run vehicles too.

Unfortunately, some insurance agents don’t explain the importance of this coverage. They assume people would prefer to decline it and save some premium dollars. Agents sometimes mistakenly believe no one should have “stacking” UM coverage if they don’t have multiple cars in their household (actually, there are several other goods reasons for it, and a full explanation about it would require a separate article). There is a lot of misinformation out there about UM coverage and why it’s important.

The important thing is that you should not listen if an agent or anyone else says you don’t need UM coverage. Buy this coverage if you can possibly afford it instead.

Educate Yourself About Your Auto Insurance Coverage Before an Accident

These observations just scratch the surface of Florida auto insurance coverage. Digging deep into it can be frustrating and mind-numbing for the uninitiated. Fortunately, just knowing what personal injury protection and uninsured motorist coverage are can help you make informed decisions and protect yourself on the road.

At Roman & Gaynor, we routinely work with clients to help them understand their coverage and their right to compensation following all types of preventable accidents. If you have questions about a possible case, contact us for a free consultation. You can also find more information about Florida auto insurance on some of our other blog posts:

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