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Nearly every state requires that you have some level of car insurance. For example, many states only require liability coverage to cover property damage and injuries. The states set minimum requirements for liability coverage. Still, they aren’t sufficient to protect you fully if you are involved in a severe accident. However, even if you do not have enough insurance, you are still responsible for any damage you cause to others’ vehicles and your own. Therefore, having enough insurance is essential to avoiding a financial headache.
To choose the right amount of car insurance for your needs, you have to consider all the factors. For example, take into account your car’s value, driving history, and how much you could reasonably afford to pay out of pocket if you were in an accident. So, how do you precisely determine how much coverage you need and what the best policy for you and your car is?
Florida State Minimum Auto Insurance Requirements
Florida state officials require anyone who owns a vehicle with at least four wheels to have proof of insurance before registering the automobile. You must show proof of Personal Injury Protection (PIP) and Property Damage Liability (PDL) automobile insurance.
PIP typically includes 80% of all necessary medical expenses up to $10,000 that resulted from an injury caused by a crash, regardless of who was at fault for the accident. On the other hand, PDL covers the expenses from damage to another personal property when you or someone else driving your insured vehicle was at fault for the accident.
Liability Insurance—More In-Depth Explanation
Liability insurance aims to provide coverage against claims for injuries and damage to other persons and property. If an insured party is found legally liable, their liability insurance covers their legal costs and payouts. However, liability insurance policies do not generally cover intentional damage or contractual liabilities.
There are other benefits of liability insurance, such as the ability to cover medical expenses and the loss of wages suffered by the victim when they were injured and out of work. In addition, if the accident results in a fatality, it may also be possible to cover the deceased’s funeral expenses.
Note: You may also hear liability insurance referred at “Third Party Insurance.”
Recommended Amount of Liability Coverage
When it comes to Liability insurance, you MUST have a minimum of $10,000 in coverage while taking residence in the state of Florida. However, sometimes, $10,000 may not be enough to cover an accident’s expenses.
That said, the recommended amount of liability insurance is a 15/30/10 split. These numbers represent how much your insurance policy will cover per accident based on the specific categories.
Here is a breakdown of what to expect with a 100/300/100 insurance coverage split: • $100,000 in bodily injury coverage per person
What is Personal Injury Insurance
Personal Injury Insurance is similar to liability; however, it covers the policyholder instead of covering someone else. With PIP, you can expect medical expenses, some out-of-work costs, and any funeral costs to be covered. The amount of coverage you will receive is dependent on your policy.
As we stated at the beginning of this article, Personal Injury Insurance is required by Florida State. Each state has its own requirements for how much Personal Injury Insurance on much carry. However, every individual registered with a vehicle with at least 4 wheels in the state of Florida must carry a minimum of $10,000.
It would be best to carry more than the state minimum because most accidents cause damage far exceeding this amount. The average cost of medical expenses for a minor and non-fatal accident is $8,900, which fits into the Florida minimum. The average cost of medical expenses after a disabling accident is $78,900, which surpasses the $10,000 minimum requirement by quite a lot. You should try to shoot for at least $50,000 but ideally, $100,000 in PIP coverage.
What is Underinsured/uninsured Motorist Coverage?
When a policyholder has uninsured motorist coverage (UM) on their auto insurance policy, coverage for medical treatment is provided. This occurs if the policyholder is in an accident with someone who does not have insurance and cannot pay for the treatment. In other words, the policy works as an add-on to a standard auto insurance policy. It pays for injuries endured by the policyholder, their passengers, and in some cases, damage to the property in the event of an accident caused by the other driver who is legally responsible but uninsured.
Underinsured Motorist Coverage is very similar to uninsured motorist coverage. It provides coverage to the policy owner for injuries and/or damages that occur when they are involved in an accident with someone who has insurance but does not carry enough to cover the entirety of the incident.
How Much Underinsured/Uninsured Coverage to Carry
There is no state minimum requirement for underinsured/uninsured motorist coverage in Florida. However, adding additional coverage to your auto insurance policy is ALWAYS a smart idea and can keep you from being screwed over if the person liable can’t pay up.
According to a study conducted in 2021, about 1 in 8 drivers are under or uninsured. These statistics show that you could very well get into an accident with someone who is legally liable but cannot afford to pay for the damage. The recommended minimum for under/uninsured motorists’ coverage is a 50/100 split or $50,000 per injured person and $100,000 per accident.
What is Collision Insurance?
Collision insurance is a type of auto insurance that reimburses the insured for any damage sustained to their personal automobile. This is in the event that the insured driver’s negligence caused the damage. The policy does not cover damage caused by theft or vandalism. If another driver were at fault, this policy would not cover damage covered by that driver’s policy.
Collision coverage also extends past accidents that occur with another vehicle. For example, suppose you have a collision policy on your car. In that case, you will also be covered if you hit a tree, pole, guardrail, sometimes deer, and most other possible roadway hazards.
Should You Get Collision Insurance?
Collision insurance is not a requirement in the state of Florida or any other state for that matter. It is, however, mandatory when leasing or financing most cars. Collision insurance is one of the most expensive add-ons on your auto policy, although it is also often one of the most important if you value your car. You can save money on collision insurance by choosing a deductible that is $500 or more.
What is Comprehensive Insurance?
Comprehensive insurance is a type of automobile insurance that covers damage to your automobile caused by other causes than a collision. For example, comprehensive insurance will cover thefts, vandalism, a damage from weather events such as tornadoes, hailstorms, and mudslides. It will also cover fire damage, breakage from falling objects, and dents from run-ins with deer.
Essentially, comprehensive insurance was designed to cover the bases that collision insurance does not. With this additional coverage, your car is protected from almost any damage that occurs outside of a crash.
How Much Comprehensive Coverage is Recommended?
Comprehensive insurance is another policy add-on that is not required by any state law, including Florida state law. However, it can provide significant relief in an unforeseen disaster. Comprehensive insurance is also highly recommended to those who live in areas with higher crime rates.
There is no recommended minimum for how much comprehensive insurance you should carry. When deciding what coverage you need, consider the age, model, and overall value of your car, as well as the area you live in, where you park your vehicle (street, garage, parking lot), and local crime rates.
The Bottom Line
Following your state’s minimum guidelines is a great place to start when shopping for an auto insurance policy. However, more often than not, the minimum requirements will not protect you enough from liabilities when you are found at fault in an accident. Additionally, the state minimum requirements will not protect your vehicle, meaning you may very well have to pay out-of-pocket for all repairs and replacements.
When insurance shopping, it is important to speak directly to an insurance agent who can help you determine what policy will best fit your needs. They will discuss your concerns and consider all factors, including risk level and the value of your car.
Stay safe, buckle up, and get properly insured today!
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