“Full Coverage” Auto Insurance: What’s Actually Covered?

Full coverage auto insurance – myth or real? The term “full coverage” is not normally used in the insurance industry, but has become commonplace when talking about coverages on an automobile policy. Insurance agents don’t like the term because it can be confusing as there are many different coverages with many different limits from which to choose. We’re going to break down the most common coverages you could run into when insuring your vehicle.

The Basics

Let’s start with the two basic coverages that are required in the state of Florida: Personal Injury Protection, or PIP, and Property Damage Liability coverage, or PD.

• Personal Injury Protection (PIP) – pays up to 80% of all reasonable medical expenses, death benefits up to $5,000, up to 60% of loss of earnings and 100% loss of services for the named insured, spouse, relatives, passengers and pedestrians who do not have their own PIP coverage and are injured in a motor vehicle accident regardless of fault. This is where the Florida No-Fault Law comes into play, which means regardless of who caused the accident, if you are injured you have to file under your own insurance policy FIRST for those injuries before attempting to receive compensation from the at-fault party. The lowest amount of coverage one can get legally is $10,000 per person, per accident.
• Property Damage Liability (PD) – pays when you are legally liable for damage to the property of others caused by your vehicle. This coverage pays for physical damage to property up to the selected limit plus the cost of any legal expenses. The minimum limit allowed is $10,000 but higher limits are always available.

And while these limits are the minimum required by law, stopping there could leave you exposed to severe financial loss.  Imagine accidentally rear-ending a luxury automobile.  You are at fault and you’ve caused property damage to others.  How far will $10,000 get you?  Guess who is responsible for the difference.

So What Else Is There?

If PIP and PD are the only two coverages legally required by the state of Florida to own a vehicle, why would you need to purchase any additional insurance coverage? What happens if your vehicle is damaged in an accident that’s your fault, if a tree branch falls on your vehicle or if you hit an animal, or what if you cause injuries to another person as a result of an auto accident that’s your fault? These are just a few examples of auto losses to which neither PIP nor PD coverage would respond.  Below is a brief summary of other common coverages you can/should consider when purchasing auto insurance.

• Bodily Injury (BI) – responds when you are legally liable for injury or death to another person caused by your vehicle. Legal fees and court costs are also included. This provides essential protection against loss of home, savings, and income if you become involved in a serious accident. And while this coverage isn’t required by law, we strongly recommend you add this to any auto insurance policy.
• Medical Payments (Med Pay) – responds to medical, dental, hospital, funeral, and related expenses for you and household relatives resulting from a motor vehicle accident. Also covers you and household relatives in other vehicles or if struck as pedestrians. This coverage only pays after PIP benefits have been exhausted or when PIP benefits do not apply. This applies only to injuries incurred in a motor vehicle accident, and does not apply to lost wages.
• Uninsured/Underinsured Motorist (UM) – responds to you, and passengers in the insured motor vehicle, any monetary damages you are legally entitled to recover as a result of bodily injury or death caused by an uninsured, underinsured, or hit-and-run motorist. In the state of Florida, this coverage is only available for injuries you sustain and not any property damage to your vehicle. The limits must equal that of your BI coverage unless you reject the coverage entirely or request other limits in writing. This coverage also applies when PIP benefits are not applicable or have been exhausted.
• Comprehensive– responds for loss or damage to your vehicle from perils such as fire, theft of the vehicle, vandalism, hail, windstorm, riot, falling objects, flood, or impact with an animal.
• Collision- responds for loss or damage to your vehicle caused by collision with another object. This will cover damages to your vehicle due to a collision regardless of who is at fault if you choose to file with your own policy.

If you are curious about your current coverage and want to explore/discuss other options, give one of our licensed agents a call at (863)683-2228.  We would be happy to review your situation and discuss alternative coverage and limits.