In this section:
- What is "pip"
- Medical Payments Coverage (med-pay)
- Lost Wages
- Property Damage Liability Coverage
- What is Uninsured and Underinsured Motorist Coverage?
- How Much um Should you Purchase? Stacked or Non-Stacked?
- Are you Adequately Insured?
In Florida, if you have an operational automobile that is licensed for use on the streets and highways of the State, you must, by law, purchase insurance for that car. However, only certain types of coverage are required by law. These required coverages are PIP (or No-Fault Insurance) and Property Damage Liability Coverage. Florida's original No Fault plan was adopted by the state legislature in 1971. It has gone through many changes over the years and the current state of the law requiring $10,000 in Personal Injury Protection (PIP) coverage is set to "sunset" or expire on October 2007.
This will have a significant impact on Florida consumers that are involved in an auto accident as they will no longer have medical coverage from injuries they sustain regardless of fault. The Florida legislature has passed on revisiting this very important consumer issue, and unless it is brought to a vote in a special session, thousands, if not millions of consumers will be paying out of pocket for medical coverage (unless they are fortunate enough to have health care insurance) that has been on the books for 36 years. The Florida Hospital Association, Florida Justice Association and other consumer groups have sent over 100,000 emails to various state legislators urging them to continue PIP and not let it "sunset". The Hospitals, doctors and lawyers are in agreement and realize the negative impact that will be thrust upon consumers by an insurance industry claiming that it is done so to lower insurance rates. The reality is that consumers will again be left paying out of pocket for medical bills caused by an accident or not being able to get treatment for their injuries at all, while insurance companies reap higher profits. We urge you to contact your state legislators and urge them to vote to continue PIP coverage before it is too late.
What is "PIP"
Personal Injury Protection, or PIP insurance covers you (and in some cases any relative living in your household) if injured in a motor vehicle accident. Regardless of who was at fault in causing the accident, your medical bills and lost wages must be first submitted to your own insurance company. This is why PIP insurance is also known as "no-fault insurance". Regardless of fault, your own insurance company will pay a percentage of your medical bills and lost wages. Under Florida law, PIP insurance must pay 80% of your medical expenses and/or 60% of your lost wages. But that is not all that PIP covers. PIP covers a percentage of other expenses such as lawn maintenance or housekeeping necessitated by injuries caused in a motor vehicle accident and also reimburses mileage expenses for travel associated with medical care treatment.
Medical Payments Coverage (Med-Pay)
Remember that PIP only pays 80% of your medical bills. Many people also purchase additional coverage known as "Medical Payments Coverage" (or MedPay). This type of coverage supplements PIP insurance and pays the additional 20% of the medical bills not covered under your PIP policy. It is probably a wise decision to purchase Medical Payments Coverage when renewing or purchasing an automobile insurance policy.
Most PIP policies provide for $10,000.00 in benefits although more expensive coverage can be purchased for a price. Unfortunately, PIP insurance can be expensive. Because Florida law requires PIP insurance on any operational automobile, sometimes consumers have to resort to purchasing PIP insurance that contains a deductible. The standard deductible on PIP policies is $2,000.00. While this type of coverage may appear to be less expensive in the short run, in the long run if you are involved in an accident, the deductible will cost you a great deal of money. Remember that PIP only pays 80% of your medical bills. Until the $2,000.00 deductible has been satisfied, your PIP policy will pay no benefits for medical bills, lost wages, housekeeping or mileage. In actuality, the deductible is greater than $2,000.00. Until 80% of your total medical expenses equals $2,000.00, no benefits will be paid. Therefore, if you choose a $2,000.00 deductible, your policy will not begin making payments until the total of your bills and lost wages exceed $2,500.00. This is because 80% x $2,500.00 = $2,000.00 the amount of the deductible.
Deductibles are very damaging in another way. Under Florida law, if you elect to purchase a deductible, you are responsible for that deductible amount. In other words, if you are injured by the negligence of someone else, because you purchased a deductible on your PIP policy, Florida law says that you are not entitled to recover the amount of the deductible from the negligent driver. This means that if you have a $2,000.00 deductible, you will automatically be responsible for $2,500.00 in medical bills. You will have no right to recover that from the person who caused your accident.
As you can see, deductibles are very deceptive. You should think very carefully before selecting a policy with a deductible. If a deductible is necessary, you should choose the smallest deductible that you can afford.
One great benefit of owning a PIP policy is the fact that it will pay 60% of your lost wages if you are hurt. Insurance companies require proof from your doctor that you are unable to work and completion of a "Wage & Salary Verification Form" by your employer before your lost wages will be paid. Once the insurance company has that information, within thirty days, they must begin paying your lost wages. As long as you are unable to work and your insurance company is kept apprized of that fact by your doctor, you will be entitled to a check from your insurance company every two weeks. Remember that PIP pays only 60% of your lost wages. You are entitled to this regardless of who caused the accident. The negligent driver responsible for the accident will also be responsible for the remaining 40% of your lost wages unpaid by PIP. However, you will not be entitled to the 40% of your unpaid wages until your case is closed.
Property Damage Liability Coverage
The other type of insurance required under Florida law is "Property Damage Liability Coverage." This insurance covers damage to property caused by the negligence of another motorist. In other words, it protects other guy in an accident. Property damage liability coverage does not protect your car if it is damaged in the accident. It only protects the property of the other person in the accident.
So what is "full coverage?" If you go to your insurance agent and ask for full coverage, you may only be given a PIP and Property Damage Liability Policy. Under Florida law, this would be considered the full coverage required. However, it will only protect you minimally if you are in an accident. Many other coverages are available:
Collision Coverage which covers your car if it is damaged in an accident, regardless of fault;
Bodily Injury Liability Coverage which applies if you have the misfortune of injuring someone in an accident; and
Uninsured or Underinsured Motorist Coverage which applies if you are injured by an uninsured or underinsured motorist.
In reality, the inclusion of these types of insurance will give you "full coverage". How much insurance to purchase is a personal decision. Remember, you want to feel comfortable that you have enough insurance to protect you under any reasonable circumstance.
What Is Uninsured And Underinsured Motorist Coverage?
Uninsured Motorist Coverage protects the policy holder and other eligible persons from personal injury damages suffered as a result of the negligence of another motorist that either does not have any Bodily Injury insurance coverage or has insufficient Bodily Injury liability coverage to compensate the injured party for their damages.
Remember, Florida law does not require Bodily Injury liability protection. The effect of this is that there are many drivers operating vehicles in the State of Florida that do not have any Bodily Injury liability coverage whatsoever. If one of these uninsured motorists causes a collision which results in injuries, then unless you have Uninsured or Under Insured Motorist coverage, you will not be able to recover any damages for your injuries other than medical expenses and lost wages under PIP. This is the case regardless of how severe the injuries may be. Nearly one-third of all cars on the road have NO Bodily Injury Liability coverage!
The standard Uninsured-Under Insured Motorist policy usually provides coverage to the named insured, their spouse, and all relatives residing in the named insured's household. The policies also usually provide coverage to any other person who is occupying the named insured's vehicle at the time of the collision. The effect of this is that if you purchase Uninsured or Under Insured Motorist coverage, you will provide coverage not only for yourself, but for members of your family and any passengers that may be in your vehicle. The UM-UIM coverage follows the person rather than the vehicle. What this means is that if the insured person is injured anywhere by an uninsured motor vehicle, then his own UM coverage will apply and compensate him for damages as long as he meets the legal requirements for recovery. This includes persons who are injured while pedestrians, occupants of someone else's vehicle that does not have UM coverage, or while on a bicycle or in some cases on a motorcycle.
The coverage applies to situations where the injuries are caused by: (1) a vehicle with no Bodily Injury Liability insurance, (2) vehicles that hit and run and cannot be identified and (3) phantom vehicles such as the situation where someone "cuts you off" and causes you to run off the road, or otherwise have a collision that causes injury. In these situations if you do not have UM coverage, even if you are seriously injured, you will not be able to recover anything other than medical expenses and lost wages.
How Much Um Should You Purchase? Stacked Or Non-Stacked?
You should first determine how many vehicles you have on the policy. The reason for this is that there are two types of UM-UIM coverage, "stacked" coverage and "non-stacked." A person who purchases UM-UIM is entitled to "stack" or add together the combined UM coverages of his/her policy in order to determine the total amount of coverage available. For example, if a person owns two automobiles each with $25,000 per person/$50,000 per accident UM limits, he/she will have $50,000 per person/$100,000 per accident available for the collision. A party has the right to stack all of his own UM coverages as well as the UM coverages of all of the cars owned by resident relatives of his/her household.
On the other hand, if you have "non-stacked" coverage and own more than one vehicle, you are limited to the UM coverage on the one particular vehicle that was involved in the collision. It is better to purchase stacked coverage if you own more than one vehicle.
Are You Adequately Insured?
Many people buy insurance through their insurance agent thinking they have bought adequate coverage to protect themselves. In our practice we have seen people who have bought what the law requires them to buy. However, you may not realize that the minimum amount of insurance coverage that the law requires in many cases is not enough. We see a lot of people in our practice who unfortunately find out too late that the minimum coverage is not adequate coverage. You should carefully examine your present insurance coverage and make sure that you understand exactly what you have and, more importantly, what you don't have. We suggest you contact your insurance agent and go through these coverages with your agent.