Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides property, liability, and medical coverage.
- Property coverage pays for damage to, or theft of, your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation, and sometimes lost wages and funeral expenses.
The State of Florida requires all drivers to have at least $10,000 coverage in both Property Damage Liability and Personal Injury Protection. If you have previously been involved in a major crash or have been convicted of a certain offense, you may also be required to carry Bodily Injury coverage. Also, if you are financing a car, your lender may have specific requirements on the types of auto insurance coverage you purchase.
Most Auto policies are for six months to a year. Your insurance carrier will notify you by mail when it’s time to renew the policy and to pay your premium.
An Auto insurance policy is comprised of six different kinds of coverage: Bodily Injury, Personal Injury Protection (Medical Payments), Property Damage Liability, Collision, Comprehensive, and Underinsured/Uninsured Motorist Coverage. Each coverage is priced separately.
- Bodily Injury
This coverage applies to injuries that you or an approved driver cause to someone else while driving a covered vehicle. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s very important to have enough Liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets, such as your home and savings.
- Personal Injury Protection (PIP) or Medical Payments
The State of Florida requires all drivers to have at least $10,000 coverage in Personal Injury Protection. Regardless of who is at fault for the accident, your insurance carrier will cover the costs of your injuries – up to your coverage level. It is important to note that PIP insurance follows the insured. So, if you are the passenger in another vehicle, your PIP insurance will cover your injuries – not theirs. However, if you have a passenger in your car who is injured, but they do not have PIP insurance, then your PIP insurance will extend coverage to these individuals (but only up to your PIP coverage level). Many carriers will also allow you to purchase additional medical payment coverage for yourself and other passengers that may be in the vehicle. PIP and Medical Payments can cover the cost of medical bills, lost wages, and in the event of a fatal accident, the cost of funeral and burial costs.
- Property Damage Liability
Unlike collision, property damage covers the cost of repairs the other vehicle involved in the crash. This coverage can also protect against damages caused by an approved driver, and it protects against damage to other types of property such as telephone poles or lamp posts, homes or buildings, mailboxes, fences, or other structures. The State of Florida requires all drivers to have at least $10,000 coverage in Property Damage Liability, but additional coverage can be purchased.
Collision provides coverage for your vehicle if there is a collision with a vehicle, object, or in the event your vehicle flips over. Regardless of fault, collision will cover the cost of the full repair, minus your deductible. So, if repairs are estimated at $6,300 and you opted for a $500 deductible on your collision coverage, then your insurance carrier will pay $5,800 while you would only have to pay $500 for the repairs. If another vehicle was involved in the crash and they were found at fault, then your carrier will likely attempt to recover the cost of repairs from the other driver’s insurance company, including the deductible that was paid which you will be reimbursed for.
When damage to your vehicle is caused by something other than another vehicle or object, like flooding, windstorm, hurricane, fire, falling objects, explosions, hail, animals, vandalism, or even damage caused during a riot or from a missile – then it is covered under Comprehensive coverage.
If your windshield ever becomes cracked, chipped, or even shatters, you can file a claim under your Comprehensive coverage. The State of Florida requires auto insurance carriers to repair or replace damaged windshields with zero deductible (essentially, “for free”) under Florida Statute 627.7288. If you opt out of this coverage, however, you will be responsible for the full cost to repair or replace your windshield.
Florida does not require that you purchase Collision or Comprehensive coverage, they are elective coverages that can provide additional coverage and protection, and they can help offset the cost of repairs. Adding these types of coverages will increase your premium; however, you can offset additional cost by adjusting your deductible. If you are leasing or financing your vehicle, having Collision and/or Comprehensive coverage may be required by your lender.
- Uninsured and Underinsured Motorist Coverage
Just as it sounds, Uninsured Motorist Coverage protects you against the cost of repairs if the other driver is not insured or leaves the scene of the accident. Florida is ranked as one of the worst states for uninsured drivers, so consider heavily on whether or not to opt for this additional coverage.
If the driver of the other vehicle only carries the minimum required insurance, the $10,000 Property Damage Liability coverage may not be enough to replace your vehicle if it is totaled in the accident. Underinsured Motorist coverage will help bridge the gap between the other driver’s insurance coverage and the damage to your vehicle.