Florida Automobile Insurance Law
- What Is "PIP Coverage"
- Medical Payments Coverage (Med-Pay)
- Lost Wages
- Property Damage Liability Coverage
- What Is Uninsured and Underinsured Motorist Coverage (UM)?
- How Much UM Coverage Should You Purchase? Stacked or Non-Stacked?
- Are You Adequately Insured?
In Florida, if you have an operational automobile that is licensed for use on the streets and highways of the State, you must, by law, purchase insurance for that car. However, only certain types of coverage are required by law. These required coverages are PIP (or No-Fault Insurance) and Property Damage Liability Coverage. Florida's original No Fault plan was adopted by the state legislature in 1971, but it has gone through many changes over the years. The Florida legislature made significant changes to the PIP law in 2012.
Currently, you are required to carry $10,000 in PIP or no-fault coverage. Further, individuals injured in car crashes have only fourteen (14) days to seek initial medical treatment as opposed to the previous policy that placed no time limit on treatment. Thus, if you fail to seek treatment within 14 days for each injury you allege is related to the crash, coverage may be denied by your carrier. Additionally, the statute now requires a qualified physician to make a diagnosis of an “emergency medical condition” before your full PIP benefits will be tendered to your treating physicians.
The statute defines “emergency medical condition” as a condition whereby the absence of immediate medical attention could reasonably be expected to result in serious jeopardy to patient health, serious impairment to bodily functions, or serious dysfunction of a body organ or part. See, Fla. Stat. 395.002(8)(a). In some instances, absence of an “emergency medical condition” could mean the difference between $10,000 or $2,500 in medical treatment for the injured person. The “emergency medical condition” designation can only be given by a medical doctor, dentist, osteopathic physician, physician’s assistant, or advanced registered nurse. Chiropractors cannot make this designation. Finally, massage therapists and acupuncturists are no longer allowed to treat patients under PIP benefits.
PIP or no-fault law has been one of constant debate within the Florida Legislature. Insurers argue that the law is a means to perpetuate fraud because it is under regulated. Insurers suggest requiring every driver to carry bodily injury (“BI”) insurance instead of PIP arguing such a law would create more oversight and less chance for insurance fraud. This means that the injured party would be required to seek reimbursement from the wrongdoer’s insurance carrier as opposed to having immediate access to medical care under a PIP or no-fault policy. The obvious concern with moving from a PIP system to mandatory BI is that persons injured in a car crash caused by another party will be required to pay out of pocket for their own medical treatment until fault is established, which may result in significant delays in treatment or no treatment at all, unless the injured party has health insurance.
WHAT IS "PIP"
Personal Injury Protection, or PIP insurance covers you (and in some cases any relative living in your household) if injured in a motor vehicle accident. Regardless of who was at fault in causing the accident, your medical bills and lost wages must be first submitted to your own insurance company. This is why PIP insurance is also known as "no-fault insurance". Regardless of fault, your own insurance company will pay a percentage of your medical bills and lost wages. Under Florida law, PIP insurance must pay 80% of your medical expenses and/or 60% of your lost wages. But that is not all that PIP covers. PIP may also cover a percentage of other expenses such as lawn maintenance or housekeeping necessitated by injuries caused in a motor vehicle accident and also reimburses mileage expenses for travel associated with medical care treatment. Florida law requires $10,000 in PIP coverage. In the case of a wrongful death, the PIP insurer may pay death benefits of $5,000 to the executor or administrator of the deceased, to any of the deceased relatives by blood, legal adoption, or marriage, or to any person appearing to the insurer to be equitably entitled to such benefits.
MEDICAL PAYMENTS COVERAGE (MED-PAY)
Remember that PIP only pays 80% of your medical bills. Many people also purchase additional coverage known as "Medical Payments Coverage" (or MedPay). This type of coverage supplements PIP insurance and pays the additional 20% of the medical bills not covered under your PIP policy. It is probably a wise decision to purchase Medical Payments Coverage when renewing or purchasing an automobile insurance policy.
Most PIP policies provide for a minimum of $10,000.00 in coverage, often contingent on a diagnosis of an emergency medical condition. More expensive coverage can be purchased for a price. Because Florida law requires PIP insurance on any operational automobile, sometimes consumers have to resort to purchasing PIP insurance that contains a deductible. The standard deductible on PIP policies is $2,000.00. While this type of coverage may appear to be less expensive in the short run, in the long run if you are involved in an accident, the deductible will cost you a great deal of money. Remember that PIP only pays 80% of your medical bills. Until the $2,000.00 deductible has been satisfied, your PIP policy will pay no benefits for medical bills, lost wages, housekeeping or mileage. In actuality, the deductible is greater than $2,000.00. Until 80% of your total medical expenses equal $2,000.00, no benefits will be paid. Therefore, if you choose a $2,000.00 deductible, your policy will not begin making payments until the total of your bills and lost wages exceed $2,500.00. This is because 80% x $2,500.00 = $2,000.00 the amount of the deductible.
Deductibles are very damaging in another way. Under Florida law, if you elect to purchase a deductible, you are responsible for that deductible amount. In other words, if you are injured by the negligence of someone else, because you purchased a deductible on your PIP policy, Florida law says that you are not entitled to recover the amount of the deductible from the negligent driver. This means that if you have a $2,000.00 deductible, you will automatically be responsible for $2,500.00 in medical bills. You will have no right to recover that from the person who caused your accident.
As you can see, deductibles are very deceptive. You should think very carefully before selecting a policy with a deductible. If a deductible is necessary, you should choose the smallest deductible that you can afford.
One great benefit of owning a PIP policy is the fact that it will pay 60% of your lost wages if you are hurt. Insurance companies require proof from your doctor that you are unable to work and completion of a "Wage & Salary Verification Form" by your employer before your lost wages will be paid. Once the insurance company has that information, within thirty days, they must begin paying your lost wages. As long as you are unable to work and your insurance company is kept apprised of that fact by your doctor, you will be entitled to a check from your insurance company every two weeks. Remember that PIP pays only 60% of your lost wages. You are entitled to this regardless of who caused the accident. The negligent driver responsible for the accident will also be responsible for the remaining 40% of your lost wages unpaid by PIP. However, you will not be entitled to the 40% of your unpaid wages until your case is closed. Further, any lost wage payments made from your PIP policy will simultaneously reduce the amount of money available under your PIP policy for your medical care. Thus, unless you have health insurance, you may wish to use your PIP benefits to seek medical care as opposed to depleting your PIP benefits with lost wage claims.
PROPERTY DAMAGE LIABILITY COVERAGE
The other type of insurance required under Florida law is "Property Damage Liability Coverage." Florida law requires a $10,000 minimum in property damage with a minimal $500.00 deductible. This insurance covers damage you cause to the property of another motorist. In other words, it protects other guy in an accident. Property damage liability coverage does not protect your car if it is damaged in the accident. It only protects the property of the other person in the accident.
So what is "full coverage?" If you go to your insurance agent and ask for full coverage, you may only be given a PIP and Property Damage Liability Policy. Under Florida law, this would be considered the full coverage required. However, it will only protect you minimally if you are in an accident. Many other coverages are available:
- Collision Coverage which covers your car if it is damaged in an accident, regardless of fault;
- Bodily Injury Liability Coverage which applies if you have the misfortune of injuring someone in an accident; and
- Uninsured or Underinsured Motorist Coverage which applies if you are injured by an uninsured or underinsured motorist.
In reality, the inclusion of these types of insurance will give you "full coverage". How much and which type of insurance to purchase is a personal decision. Remember, you want to feel comfortable that you have enough insurance to protect you under any reasonable circumstance.
WHAT IS UNINSURED AND UNDERINSURED MOTORIST COVERAGE?
Uninsured-Under Insured Motorist Coverage (“UM-UIM”) protects the policy holder and other eligible persons from personal injury damages suffered as a result of the negligence of another motorist that either does not have any Bodily Injury insurance coverage or has insufficient Bodily Injury liability coverage to compensate the injured party for their damages.
Remember, Florida law does not require Bodily Injury liability protection. The effect of this is that there are many drivers operating vehicles in the State of Florida that do not have any Bodily Injury liability coverage whatsoever. If one of these uninsured motorists causes a collision which results in injuries, then unless you have Uninsured or Under Insured Motorist coverage, you will not be able to recover any damages from an insurance carrier for your injuries other than medical expenses and lost wages under your PIP. This is the case regardless of how severe the injuries may be. Nearly one-third of all cars on the road have NO Bodily Injury Liability coverage!
The standard UM-UIM policy usually provides coverage to the named insured, their spouse, and all relatives residing in the named insured's household. The policies also usually provide coverage to any other person who is occupying the named insured's vehicle at the time of the collision. The effect of this is that if you purchase Uninsured or Under Insured Motorist coverage, you will provide coverage not only for yourself, but for members of your family and any passengers that may be in your vehicle. The UM-UIM coverage follows the person rather than the vehicle. What this means is that if the insured person is injured anywhere by an uninsured motor vehicle, then his own UM coverage will apply and compensate him for damages as long as he meets the legal requirements for recovery. This includes persons who are injured while pedestrians, occupants of someone else's vehicle that does not have UM coverage, or while on a bicycle or in some cases on a motorcycle.
The coverage applies to situations where the injuries are caused by: (1) a vehicle with no Bodily Injury Liability insurance, (2) vehicles that hit and run and cannot be identified and (3) phantom vehicles such as the situation where someone "cuts you off" and causes you to run off the road, or otherwise have a collision that causes injury. In these situations if you do not have UM-UIM coverage, even if you are seriously injured, you will not be able to recover anything from the insurance carrier other than medical expenses and lost wages.
HOW MUCH UM-UIM SHOULD YOU PURCHASE? STACKED OR NON-STACKED?
You should first determine how many vehicles you have on the policy. The reason for this is that there are two types of UM-UIM coverage, "stacked" coverage and "non-stacked." A person who purchases UM-UIM is entitled to "stack" or add together the combined UM-UIM coverages of his/her policy in order to determine the total amount of coverage available. For example, if a person owns two automobiles each with $25,000 per person/$50,000 per accident UM-UIM limits, he/she will have $50,000 per person/$100,000 per accident available for the collision. A party has the right to stack all of his own UM coverages as well as the UM-UIM coverages of all of the cars owned by resident relatives of his/her household.
On the other hand, if you have "non-stacked" coverage and own more than one vehicle, you are limited to the UM coverage on the one particular vehicle that was involved in the collision. It is better to purchase stacked coverage if you own more than one vehicle.
ARE YOU ADEQUATELY INSURED?
Many people buy insurance through their insurance agent thinking they have bought adequate coverage to protect themselves. In our practice we have seen people who have bought what the law requires them to buy. However, you may not realize that the minimum amount of insurance coverage that the law requires in many cases is not enough. We see a lot of people in our practice who unfortunately find out too late that the minimum coverage is not adequate coverage. You should carefully examine your present insurance coverage and make sure that you understand exactly what you have and, more importantly, what you don't have. We suggest go through these coverages with your insurance agent.