Most people do not consider what a healthy auto insurance policy should include until it is too late – that is until after they have been involved in a motor vehicle accident (MVA). Many of my clients tell me that they have “full coverage”. “Full coverage” is a deceitful term that is perpetuated by ill-informed insurance adjusters. “Full coverage” indicates that my client has the minimum coverage required by the state of Florida. The state only requires Personal Injury Protection (PIP) and Property Damage (PD), which is not enough to protect you and your family.
PIP will pay for your medical bills up to $10,000.00 regardless of who was at fault for the MVA. This is why Florida is considered a “no-fault” stat, because your our own insurance pays for your initial medical treatment . PIP will also reimburse you for a portion of your lost income and other disability benefits. PD, on the other hand, is meant for the other person. If you caused the MVA, your PD will pay for any property damage you caused to someone else’s property. It’s easy to see that PIP and PD alone, do not offer adequate coverage if you are injured in an MVA.
So what does a healthy auto insurance policy look like anyway? In addition to the required coverage, I recommend Bodily Injury (BI), Un/Underinsured Motorist (UM) (stacked), Comprehensive, Collision, and Rental Coverage.
BI – pays for someone else’s injuries if you caused the MVA. Having BI will protect you from getting sued if you or the driver of your car is responsible for an MVA. The amount of BI coverage is an individual financial decision based on factors such as your income and your assets. You want to make sure that you have enough coverage to protect all of your assets.
UM – steps into the shoes of the at fault party and pays for your injuries if the at-fault person did not have BI or if they had inadequate BI. In Florida, you can only purchase UM up to the amount of BI on your policy. I also recommend stacking your UM coverage, which means that you multiple your coverage by the number of vehicles you have on your policy. This in turn, will allow you to have more UM coverage at a better rate.
Comprehensive and Collision – are for your vehicle if your vehicle is damaged because of a collision or for any other reason such as fire, falling trees, or theft. If you make a property damage claim under your Comp. or Collision, your Rental coverage may compensate you for a rental vehicle.
Car accidents happen every single day and you do not want to find yourself injured with inadequate coverage. I therefore implore you to go home tonight and review your auto insurance policy. You may be surprised to see that your coverage is inadequate.
