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Automobile Insurance Coverage 101

Automobile Insurance Coverage 101

This summer many of us will have our automobile insurance policies up for renewal. When opening a new auto policy, or renewing an existing policy, it’s important to know what your options are and to understand the different types of auto insurance coverage that are available.  Of course, each type of coverage you choose will affect the premium you pay, so it’s important for consumers to be aware of the different types of auto insurance coverage and the policy limit amounts that might best serve each driver’s needs.

Bodily Injury insurance is insurance that protects the policyholder if the policyholder or someone with the policyholder’s consent operates a vehicle listed on the automobile insurance policy and causes an accident that harms another person.  If a claim by the injured individual is brought against the policy holder and/or the operator of the vehicle, bodily injury insurance coverage pays to provide a legal defense to the policyholder and operator, as well as coverage for any eventual settlement or judgment in favor of the injured person.  Basically, bodily Injury coverage protects the policyholder and the consensual drivers of the policyholder’s vehicle against paying out of pocket for a legal defense or judgment in a case of an at fault accident.  The normal policy limits for bodily injury coverage varies from $10,000 to $1,000,000.  It is important for the owner of the vehicle to have bodily injury coverage on their automobile policy to protect them against claims that may be made against them by a person injured in an accident.  The amount of coverage held by a policyholder depends on several factors, including the policyholder’s assets. Bodily injury coverage is not yet required by state law. Recently the Florida Legislature passed a law requiring mandatory bodily injury coverage, but this law was ultimately vetoed by Governor DeSantis.

What is mandatory in Florida is Personal Injury Protection. Automobile owners are required to purchase this type pf coverage. Personal Injury protection coverage (PIP) is typically purchased with policy limits of $10,000. PIP can also be purchased with a deductible. The purpose of personal injury protection coverage is to pay for medical bills incurred by the policyholder or the policyholder’s consensual drivers and family members if any of those individuals are injured in an automobile accident and need medical treatment. Personal Injury Protection coverage pays 80% of reasonable medical charges up to the policy limit of $10,000.  Examples of medical expenses that are covered by Personal Injury Protection would be chiropractor visits, hospital visits, urgent care visits, and specialist visits.  Personal Injury Protection also covers a portion of an insured’s wages if those wages were lost as a result of injuries sustained in an automobile collision.  Although policy premiums for PIP vary by carrier, the benefits provided are regulated by statute.  In addition to PIP, some policyholders may choose to purchase additional medical payments coverage which pays for the 20% of the medical expenses not covered by PIP and any amount of medical expenses once PIP is exhausted until the exhaustion of the medical payments policy  limits. Typical Medical Payments policy limits are $5,000. It’s important to know that if an insured carries health insurance and sustains medical treatment as a result of an automobile collision, the health insurance will not make payments toward the medical bill expenses until the PIP is exhausted.

Property Damage Coverage is insurance that provides the vehicle owner with legal protection against claims made against the insured for property damage incurred by a claimant against the insured when the insured causes an automobile collision. This coverage pays for repair and or replacement of a vehicle of another party whose vehicle is damaged or destroyed as a result of an accident caused by the insured. This coverage provides a legal defense and payment of settlement or judgment against the insured if the adverse party makes a claim against the insured for damage to their vehicle.  This coverage is required under Florida Law at a minimum of $10,000. This coverage can be obtained with higher policy limits and the premiums would rise accordingly.

Collision/Comprehensive Coverage is coverage that is available to an insured to pay for damage or loss to the insured’s own vehicle. This coverage is not mandatory in Florida. An insured would purchase this coverage to protect against the cost of repair or replacement of the insured’s vehicle if the at fault party carried no Property Damage coverage.

Uninsured/Underinsured Motorist coverage is an optional coverage that protects an insured in case the insured sustains injuries due to the negligence of an at fault driver who carries none or minimal bodily injury coverage on their auto insurance policy. Uninsured/Underinsured policy limits can range anywhere from $10,000 to $1,000,000.  This is extremely important coverage for a policy holder to purchase as it is the only coverage that will pay for pain and suffering damages, out of pocket medical expenses, lost wages, and the cost of future medical care for an insured if an at fault driver causes injury and damages to an insured and carries insufficient bodily injury coverage. Studies in Florida show that a large percentage of people operating vehicles in Florida carry no or little bodily injury coverage. Therefore, its important for policyholders to obtain uninsured/underinsured motorist coverage to protect them and their families in case they sustain damages due to the fault of the uninsured/underinsured motorist.

The attorneys at Lesser, Lesser, Landy, & Smith are experts at handling insurance coverage issues and negotiations with insurance carriers. If you have any questions regarding automobile insurance coverage, we would be happy to speak with you with.

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