Car insurance is the most common form of insurance in the state of Florida. Despite this, nearly 1 in 4 Florida drivers continue to drive without car insurance, which is one of the highest uninsured motorist rates in the United States. These statistics underscore the need to obtain Florida car insurance to protect yourself and your loved ones, but it also highlights the fact that too many drivers forego insurance. One of the reasons drivers do not have insurance is, arguably, due to the complexity of understanding Florida car insurance laws.
This car insurance guide is designed to change that, providing readers with a comprehensive look at Florida's car insurance laws and regulations. This guide will discuss:
First, let's begin with the basics of Florida car insurance law and how car insurance works.
Broadly speaking, car insurance is designed to protect drivers and their passengers from incurring financial hardship after a car accident or similar incidents involving a vehicle. Without car insurance, it is difficult for victims of an accident to receive compensation for injuries sustained. Similarly, drivers who cause an accident could face huge costs that are financially devastating without having the proper auto insurance.
Car insurance serves as a safeguard, then, helping drivers avoid the burdensome costs that can accrue after a car accident. At-fault drivers can cover injury costs and property damage, while accident victims receive the compensation needed to repair and rebuild their lives.
Of course, this money and financial protection is not freely available. Floridians must receive car insurance policies from a car insurance company. Your individual insurance rates will be based on the insurance company's assessment of the risk involved in insuring you. To make this assessment, a Florida insurance company will look at a number of factors, including:
These types of factors will then lead to an assessment risk and the cost it will take to insure you. This, in effect, is how insurance companies make their money. By collecting premiums from their pool of drivers paying for their insurance policy, the company has the funds needed to pay out submitted claims when accidents occur.
Now that you have an understanding of the basic framework surrounding Florida car insurance law, let's look at the specific legal requirements of Florida car insurance.
The state of Florida requires two specific types of car insurance. These two insurance types are personal injury protection (PIP) insurance and property damage liability (PDL) insurance. Later sections will dive into more detail on these mandatory forms of insurance, but for now, a simple explanation is as follows:
Florida law requires drivers to have a minimum of $10,000 PIP insurance as well as a minimum of $10,000 PDL insurance. Any vehicle owned in Florida with at least four wheels must be insured when it is registered.
While these amounts may seem sufficient, they are nowhere near enough to properly protect you from risks on the road. The $10,00 requirements are legal minimums for a reason. And, even worse, neither of these bare minimums provides liability insurance that offers coverage for injuring another person.
In effect, understand that these forms of coverage alone are not sufficient for the insurance needs of most Floridians. An insurance agent may try to tell you that obtaining these minimums provides "full coverage". The only thing that is full with regards to these insurance amounts is that they are fully compliant with the absolute minimum coverage required under Florida law. In every other respect, the coverage is inadequate.
If you are curious about the legal minimums of other states, check out this handy resource that outlines state-by-state minimum coverage requirements.
While the state of Florida is a no-fault car insurance state, don't think that you do not need bodily injury liability car insurance. Faulty assumptions like these are one of the reasons Florida drivers only realize their insurance coverage was inadequate once it is too late to upgrade coverage.
As a general rule, you should try to gain the follow additional coverages:
If obtaining all these forms of coverage proves too burdensome or you fail to see the need for rental coverage, for example, then focus on a few of the "must have" additional coverages.
For starters, any motorist can use the benefits of bodily injury liability coverage. Simply put, this is coverage for when you hurt someone else. Under Florida law, you can be sued if you cause an accident that results in the physical injuries of others. Worse, insurance companies are legally permitted to sue you if they pay for an individual's injuries under an uninsured motorist policy.
Your best protection against one of these lawsuits is to have an adequate amount of bodily injury liability (BIL) coverage. BIL coverage pays for medical expenses, lost wages, pain, suffering and similar harms. While this is not a mandatory form of insurance, the state of Florida will suspend your driver's license if you injure someone in an accident and cannot reimburse the injured victims for their injuries. So, while BIL coverage is not a legal requirement, per se, no Florida driver should operate a vehicle without this coverage.
The lowest amount of BIL coverage you can buy is $10,000 per person in a Florida accident. However, this $10k figure is limited to a total coverage limit of $10,000 per accident. For this reason, the insurance is termed 10/20 coverage. As an example, if you injure 4 people in an accident, your insurance company will pay no more than $10,000 to any one person and no more than $20,000 collectively to the injured parties.
As such, it is in your best interests to obtain more substantial coverage. Other coverage limits are:
The coverage you need will depend on what you need to protect and the monthly premiums you can afford. Later in this guide, we will cover what some of these coverage types will cost you in Florida.
Discussed earlier in the guide, PDL pays another person when their car or property is damaged in an auto accident. We discussed this earlier in the context of Florida's legal requirement to obtain $10,000 in PDL coverage.
Even in the most minor of accidents, $10,000 may not be enough. For anything more than the simplest of fender benders, you will likely come to regret not having more than $10k in PDL coverage. Other drivers who have their vehicle and property damaged are not limited to the coverage limits set forth by your policy. Regardless of the insurance you have, individuals with damaged vehicles and property are legally permitted to sue you for the full extent of the damages caused.
Let's look at an example of how a lack of PDL coverage could come back to bite you. Imagine you rear-end someone's vehicle and push their vehicle through a neighbor's fence or into some other surrounding property. This scenario happens far more often than you would otherwise think. In such a scenario, you would be liable to the other driver as well as the homeowner whose property was damaged. The damages would include physical damage to the vehicle, the home, the lawn and fence (if applicable), and you would be responsible for the reduction in value to the driver's vehicle. As you can see, the costs of such an accident could quickly pile up, and this is just an example of a "minor" accident.
As a general rule, increase your PDL coverage as much as possible. Of course, obtaining the maximum amount of coverage may not be possible since you also want to add other coverage types. But, causing $50,000 of property damage in an accident is not uncommon. Target PDL coverage of $25,000 if strapped financially, otherwise aim for $50,000 or higher.
Referred to as no-fault insurance, personal injury protection (PIP) coverage joins PDL coverage as one of the two mandatory forms of car insurance required by Florida law. However, the $10,000 limit is not enough. This is the same minimum amount since PIP was made mandatory in the 1970s. $10,000 in 1978 dollars is more than $35,000 in today's dollars.
As such, purchase additional PIP if you have the means to do so. PIP pays for 80% of medical expenses and 60% of lost wages up to the limit of your coverage amount. For serious accidents, $10,000 is nowhere near enough. Without PIP, an injured accident victim would be forced to pay for medical expenses themselves, before then having to fight for reimbursement by the other driver or his insurance company. These frustrations are all avoided by having a substantial amount of PIP coverage.
Similarly, medical payments coverage provides the same type of coverage as PIP. It differs only insofar as medical payments coverage pays for the 20% of costs that PIP does not cover. Remember, PIP pays for 80% of medical expenses up to the limit of your coverage amount.
Medical payments coverage also reimburses the insured for deductibles and medical expenses that are in excess of the limits set forth by PIP. Best of all, medical payments coverage is even available to be used in a motorcycle accident, unlike PIP. This inexpensive coverage is a great complement to PIP and is a huge benefit should you become a victim of a serious auto accident.
As the name implies, collision coverage protects you if your vehicle is damaged in a collision. The collision coverage applies to virtually anything, including:
Collision coverage also protects you in the event of an "upset", a term used to describe your car being overturned in an accident. This form of coverage pays for damages regardless of who is at fault for the collision.
Comprehensive coverage is designed to cover you in the event your car is lost in an accident not caused by a collision or upset. Comprehensive claims can be quite wide ranging as a result. Examples of comprehensive claims include:
Comprehensive insurance can compensate you for items that are stolen from your vehicle, if those items are not already covered under a homeowner's insurance policy. Typically, this insurance is best suited for new cars or extremely valuable cars. For an old car, it may not be cost-effective to obtain these forms of coverage.
UM coverage is another must-have addition to your auto coverage. Why? This coverage type pays you for physical injuries and lost wages if you are injured by a driver who either has no bodily injury liability coverage or does not have enough of it to pay for your injuries. Remember, Florida has one of the highest uninsured motorist rates in the country. While UM coverage is important everywhere, it is especially important in Florida.
There are a range of coverage limits you can purchase, but UM is unique in that it can be stacked. For example, if you and a spouse both have Um coverage of $100,000 per person and $300,000 per accident, the amounts stack and become $200,000 and $600,000 respectively, if both of you are injured.
Florida law requires you to sign a state-approved form to reject UM coverage. Do not let insurance companies dupe you into doing so. UM coverage is critically important and a form of coverage no Florida driver should be without.
While the need for rental car coverage and GAP coverage are not as essential as previous coverage types, they still provide valuable peace of mind and protection. In other words, obtain this coverage if you have more room in your budget.
Rental car coverage provides you with a rental car if your car is damaged and/or stolen. This inexpensive form of coverage is a true convenience should the unexpected happen. Additionally, it helps when your car is damaged by a driver. While a driver or their insurance company is liable to pay for a rental car, bureaucratic red tape can slow down the process. When a rental car is needed quickly, rental car coverage is your best bet.
GAP insurance, as the name suggests, pays you the difference (or gap) between the market value of a vehicle and the loan amount. This insurance can be skipped for anyone who paid cash for their car, but anyone who gets a loan or lease for their car needs GAP coverage. In an accident with an at-fault driver, the driver and/or insurance company only owe you for the market value amount of the car, not the loan amount. Loan amounts can exceed a car's market value, which would leave you on the hook for those unpaid for costs.
Based on this information, you may be left wondering how much is auto insurance, really? While there is no one size fits all answer, you can get a pretty good estimate of your average car insurance payment based on your individual risk factors and the types of coverage you plan to obtain.
A new car insurance policy can provide the coverage you need at a price point you can afford, provided you do the research and reach out to licensed insurance agents for a quote. When you research car insurance coverage, be sure to:
In the event of an accident and/or the involvement of insurance companies, you absolutely need a car accident lawyer to protect your legal rights. This is true whether you are pursuing an accident claim or need protection from overzealous insurance companies.
I'm Joshua Wagner, and my law firm will protect your legal rights and pursue your right to receive deserved compensation after an accident. Our attorneys are Daytona beach lawyers who provide personalized and committed legal representation our clients trust.
If you are ready to talk with one of our Daytona Beach attorneys about your car insurance questions and concerns, contact us for a free case evaluation.