I often hear people say "I have full coverage" when they tell me the type of automobile insurance they have purchased. The term itself is a bit misleading, as most people think they are fully covered for any loss. The truth is that "full coverage" often means that you are "fully covered" under the law, i.e. the bare minimum of insurance coverage required under Florida law.
Florida law only requires that you carry Property Damage (PD) and Personal Injury Protection (PIP). PD pays for damage you cause to other people's property. PIP pays for your own medical expenses and lost wages that directly result from an automobile accident, whether or not you were at fault. For a detailed explanation of how PIP in Florida works, I urge you to read my post "What to Expect From Florida’s New No-Fault (PIP) Law."
There are various automobile insurance coverage plans available in Florida that are not required by law. These include Med Pay, Collision, Comprehension, Bodily Injury, and Uninsured Motorist. Below are brief descriptions of each plan:
- Med Pay: PIP coverage pays for 80% of your accident related medical expenses. Med Pay coverage steps in and pays your 20% co-pay for medical expenses, and possibly helps pay for medical expenses above the $10,000.00 PIP limit.
- Collision: Collision coverage pays for the repairs to your vehicle if you were at fault, or if the at-fault party was uninsured.
- Comprehensive: Comprehensive coverage is similar to collision, but comprehensive coverage pays for damage to your vehicle due to flood, fire, theft, and other circumstances not considered to be caused by a "collision."
- Bodily Injury: Bodily Injury (BI) coverage is liability coverage, and it is crucial. If you cause an accident which results in bodily harm to another person, you can be sued and found liable for their damages. BI coverage will be used to pay for the victim's economic damages (out of pocket expenses) and the victim's pain and suffering (if they can prove a permanent injury). If you get served with a lawsuit, your insurance company will hire and pay for an attorney to properly defend your claim in court under your BI coverage.
- Uninsured or Underinsured Motorist: Uninsured or Underinsured Motorist (UM) coverage is just as important as BI. UM coverage will "step into the shoes" of an at-fault party who carries no or too little BI coverage, and if the accident that they caused results in your bodily harm. Too often I come across accident victims with serious injuries and extremely high medical expenses who were hit by an uninsured or underinsured driver. Sometimes these accident victims carry no private health insurance. If you were one of these victims, without UM coverage, only $10,000.00 of your medical expenses would be paid (under PIP), and you could be left with a mountain of medical debt and no compensation for your injuries.
Do not make the mistake of thinking you are fully covered because someone else told you that you have "full coverage." Carefully review your insurance policy and contact your insurance company to find out more about the available coverage plans and the associated premiums.