The question I wish more people would ask! How to properly insure yourself in Florida
What should I do after an accident? This is the question I get more than any other. However, this is the WRONG question to ask because that means you’ve already been involved in an accident. This guide will explain the importance of understanding Florida's auto insurance laws and your own policy.
Florida's Unique System of Auto Insurance; Understanding PIP, BI and UM/UIMFlorida is a unique state in that individuals are expected to protect themselves from the wrongful acts and negligence of others. It doesn’t matter that you are a safe driver with a perfect driving record and have never been involved in an accident or received a speeding ticket. It doesn’t matter that you have religiously made your insurance payments year after year without ever having to make a claim. It doesn’t matter that you didn’t cause the accident. The only thing that matters is the auto insurance you have prior to getting into an accident. This may seem like an oversimplification, but let me explain. First, Florida is a No-Fault accident state. This concept will not be fully addressed here so please visit, “No-Fault? No way, they hit me!!” for a full breakdown of Florida’s No-Fault laws. But, it is important to mention No-Fault because it emphasis the fact that Florida expects residents to take care of themselves! In short, after an accident your own insurance is responsible for paying 80% of your medical bills. Why not the full amount? Beats me, but that’s the system our lawmakers designed. The next obvious question is “who pays the rest?” And this my friends is why it’s so important to prepare for an accident because the answer may shock you. In a perfect world the at-fault individual would pay that remaining amount and any other damages (we’ll get into that in a second). But guess what? Florida does not require drivers to carry Bodily Injury coverage!!! This is the coverage that would step in to pay for your medical bills, pain and suffering, lost wages, future medical care and so on, and it’s OPTIONAL coverage, meaning someone has to willingly pay MORE for insurance than they have to! Step back for a moment and think about this. Do you honestly believe that individuals are thinking about the wellbeing of others when they are shopping for insurance or are they trying to spend as little as possible? Shocking isn’t it? You may be saying to yourself “right, they don’t have to buy Bodily Injury insurance but they are still responsible for their actions” and you would be correct, they are still responsible. You have the right to sue that person directly and obtain a judgement against them. But as the old saying goes “you can’t squeeze water from a rock!! The bitter truth is that the majority of our population is “judgment proof” meaning that even if there is a judgment against them, good luck ever getting paid!
What to do BEFORE an accident; Reviewing your OWN insurance policy.The first thing you need to do is pull out your own automobile insurance policy. I don’t care if your insurance agent for the last 20 years who’s your best friend and married to your sister told you that you have full coverage, TAKE OUT THE POLICY AND LOOK AT IT!! Too many times I have clients who THINK they have full coverage only to find out that the definition of “full coverage” isn’t quite what they thought. You see, full coverage is a term created by the insurance companies to trick, confuse and dupe the average consumer into thinking they are getting all the insurance they need when in reality it’s nothing more than a gimmick. Full coverage, generally speaking, is going to mean that your VEHICLE is fully insured against damage whether it’s caused by you, someone else or an act of nature, and includes Property Damage, Collision and Comprehensive coverage. The problem is that this does not provide insurance to protect others from your negligence OR provide you with insurance to protect you from the negligence of others. So now that you have your insurance policy out, here’s what you need to check:
Who is your insurance carrier?: The ugly truth is that not all insurance carriers are created equal. Further, not all insurance companies are in the business of protecting their insured. Some companies will do everything they can to deny your claim or void the insurance policy. This will happen even if you’ve paid your premium and have never made a claim before. Why? Simple, these companies write policies that they never intend to provide coverage for and are only interested in collecting premiums. Look at your policy, find out who your carrier is and research them. If you don't like what you see go online and get quotes from other companies and make an easy switch.
Bodily Injury coverage: This is the portion of your insurance policy that steps in and pays others for your negligent acts. This amount needs to be sufficient to protect your overall net worth in the event you cause an accident. A good rule of thumb that I use to determine the amount of Bodily Injury coverage to purchase is to base it on your annual salary. For example if you earn $50,000.00 a year, purchasing a Bodily Injury policy with limits of $50,000/100,000 should be sufficient. However, this is a personal decision and more coverage is always better. You may be saying “but wait, you said earlier this isn’t mandatory so why should I waste the money?!?” Good question, but without purchasing Bodily Injury coverage you are left exposed to liability resulting from an accident, and moreover, you CANNOT purchase the insurance needed to protect yourself without first having Bodily Injury coverage.
Uninsured/Underinsured Motorist (UM) coverage: This portion of your policy compensates YOU for the negligent acts of Uninsured or Under-insured individuals. THIS IS THE ABSOLUTE MOST IMPORTANT PART OF YOUR INSURANCE POLICY. This is the coverage you purchase to protect yourself from the negligence of people who are "judgment proof." As stated above, this coverage CANNOT be purchased unless you carry BI coverage and cannot exceed that amount (see UM PRO TIP below).