In Florida alone, there are nearly 400,000 car crashes every year. When crashes occur, the first questions we ask are often about insurance. Who is your insurer? What kind of insurance do you have? What are your policy limits? While most people know the name of their insurance company, an overwhelming majority have difficulty describing the types of coverages they have and the amount of coverage available. After a crash, clients will often say they’re fully covered, or that their carrier told them they purchased “full coverage.” The problem is, there’s no such thing as “full coverage” in Florida.
The “Full Coverage” Myth
Every car owner in Florida is required to purchase Personal Injury Protection, or “PIP” insurance. PIP insurance (also referred to as “no fault” insurance) provides coverage for 80% of the cost of medical treatment up to a maximum of $10,000, and provides benefits for lost wages. Unfortunately, PIP insurance provides benefits only to the person insured under the policy (the “insured”) and their children or members of their household who qualify, which may leave out others who were injured in the crash. Because PIP insurance is the only type of injury coverage required by law, Floridians are often told (by insurance companies) that if they purchase PIP insurance and coverage for property loss, that they are “fully covered.”
But, what happens when other people are injured? What if your own medical bills exceed $10,000? Can you be sued for the costs of medical expenses not covered by PIP? What if the at-fault driver has no insurance at all?
To answer these questions, it’s important to know about the different types of coverages available. And when it comes to protecting yourself from having to pay high medical bills for injuries to you or to others, Bodily Injury liability coverage and Uninsured / Underinsured Motorist coverage are at the top of the list.
When Others are Injured
Bodily Injury liability coverage, or “BI” coverage, protects you financially when you are at fault for a crash. When a crash occurs, the at-fault driver is responsible for paying the damages incurred by other people involved in the crash. Those damages can include medical costs, lost wages, pain and suffering, disability, disfigurement, mental anguish, inconvenience, loss of the enjoyment of life, and other losses incurred as a result of the crash. These damages add up quickly and can be enormous. If the at-fault driver has BI coverage, his or her insurance company will pay those damages up to the amount of the policy limits. On the other hand, if you are not protected by BI coverage, you would be responsible for those damages out of pocket.
Because of this potential exposure, it is extremely risky to drive a vehicle in Florida without BI coverage. If you do so, and cause an accident, you may have to pay huge medical bills for anyone injured in the crash. Unfortunately, insurance companies often fail to explain these risks to their customers—perhaps because they don’t want to pay for expensive medical bills if a crash occurs. Instead, they often tell their customers that they have “full coverage.” By doing so, insurance companies will sell more policies than they would if they described that same coverage as the minimum insurance required by law.
When Others Fall Short
Uninsured / Underinsured Motorist coverage (or “UM” coverage) is also extremely important. UM coverage protects you when you are injured by a driver that has no insurance at all, has PIP insurance but no BI coverage, or has BI coverage but not enough. For example, suppose you are injured because of the negligent driving of someone else, and your medical expenses are $100,000. And assume that the person who injured you has an insurance policy with $25,000 of BI coverage. After the at-fault driver’s insurance company pays $25,000 from the BI coverage, you still have $75,000 in medical costs plus damages for lost wages, pain and suffering, etc… In this scenario, the at-fault driver is underinsured. So, what do you do?
If you do not have UM coverage on your policy, you are left to pay these costs out of your own pocket. If, however, you do have UM coverage, your insurance company will be required to pay those damages up to the limits of your coverage. In a scenario where you’re injured by a driver with no insurance at all, you could be faced with paying the entire cost of medical care on your own. This is particularly scary when you consider that the Insurance Research Counsel estimates that 1 driver out of every 7 in the United States is uninsured. Even so, many insurance companies fail to explain this critical coverage to their customers. Instead, they sell policies that comply with the minimal legal requirements and then tell their customers not to worry because they’re “fully covered.” By doing so, insurance companies collect premiums while still avoiding the risk of having to pay large medical costs for people who are seriously injured in a crash.
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Accidents happen. And when they do, insurance is designed to help deal with the damages that result. But to be truly protected, you should understand the risks associated with a crash and the types of insurance needed to deal with those risks. The next time your insurance company tells you that you’re “fully covered,” tell them that you would rather be fully informed! Ask them to explain each type of coverage included on your policy and also each type of coverage not included on your policy. Only then will you be protected if a crash occurs.
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Shaun Cummings is a Florin|Roebig trial attorney representing clients in Personal Injury cases. In 2016, Shaun was an instrumental trial co-counsel in the largest contested jury verdict in Hernando County, Florida history ($42 million). See his full bio.