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Why You Should Buy Uninsured Motorist (UM) Coverage
Does Personal Injury Protection (PIP) Insurance Cover All of Your Injuries?
Florida is one of ten states considered to be no-fault states. The purpose of no-fault insurance is for each driver to use their own insurance to pay for medical expenses and lost wages, regardless of who is at-fault in an accident. This means that if you are involved in an auto accident in Florida, your initial means of paying for physical injuries and lost wages is your own PIP policy.
In Florida, Personal Injury Protection (PIP) Insurance is your initial auto insurance. Every driver in Florida is required, by law, to have PIP insurance. The minimum PIP policy required under Florida law, is as follows:
- $10,000 in Personal Injury Protection (PIP) – This covers up to 80% of your medical expenses and 60% of your lost wages, up to the limits of your PIP policy and minus your deductible.
- $10,000 in Property Damage Liability (PDL) – This insurance pays for damages that may be caused by you or your family members, to someone else’s property. It does not cover your vehicle or property.
Motorists in Florida are not currently required to carry Bodily Injury (BI) Liability Coverage. One study concluded that over 50% of all drivers do not have BI coverage. This means that over 50% of Florida’s drivers have no insurance to pay for physical injuries they may cause to you once your PIP is exhausted.
Limitations of PIP
As attorneys who deal with countless car accident victims, the stark reality is that PIP is a drop in the bucket when you consider the true costs involved with serious auto accidents. Another reality is that far too many motorists in Florida only have PIP and believe that is all they need to protect themselves. That couldn’t be further from the truth.
For example, a study conducted by the Association for the Advancement of Automotive Medicine concluded that the medical costs alone that are associated with an auto accident related minor injury, ranged from $13,700 to $27,400. The costs associated with a critical auto accident injury ranged from $322,800 to $1.4 million. These statistics are from 2003. Medical costs have skyrocketed since then.
Those costs are also per person. What if your entire family is injured in an auto accident? Multiply those costs by the number of people injured and the severity of those injuries. The other factor not included in the above costs are lost wages. If you and/or your spouse are seriously injured, you’ll certainly be out of work. Remember, your bare bones PIP policy is $10,000. See the problem with PIP coverage?
I’ll Just Sue the Other Driver
Many people believe that suing the other driver is the answer to their accident related financial problems. Here are the facts that you need to understand:
- Nearly 25% of all motorists in Florida have no insurance. These same drivers, known as uninsured drivers, are likely to have no personal assets of value. If they have no auto insurance, you can’t file an insurance claim. While you could certainly win a judgment against the other driver, if they have no assets to seize, what good is the verdict? You’re still in the same financial mess.
- Outside of uninsured motorists, you have a very large population of drivers who only have a bare bones bodily injury policy. These are considered underinsured motorists. In other words, there is not sufficient insurance there to cover all of your injuries even after PIP pays and is exhausted. Remember, if they only have bare bones insurance to file a claim against, a paper judgment is essentially worthless as it is very likely that these drivers will be in the same financial situation as the uninsured motorists. If they have no assets of value, any verdict against them is pointless.
As a motorist in Florida, you have a greater than 25% chance of being hit by someone who either has no insurance or the bare minimum insurance. You have a 50% or greater chance of being hit by someone who doesn’t have BI coverage. In either case, if you only have PIP, there’s a very good chance that you’ll have to pay for your own medical expenses, even if they were 100% at-fault for the accident. That’s not counting lost wages either.
I Have Health Insurance
This is another common statement we hear. The belief is that health insurance will cover you after an accident. It might, with a big catch. Under many health insurance policies, you may be required to pay them back, in full, for any auto accident related treatment if you are actually fortunate enough to get any recovery.
A big limitation of health insurance is that it doesn’t cover any lost wages. Further, it doesn’t pay for any significant accommodations for injuries like paralysis. For instance, if a person is left paralyzed from an accident, it typically won’t pay for wheel chair ramps in your home or modifications to your vehicle to transport a wheelchair.
If you want to protect yourself and your family, you’ll have to do it yourself. The other drivers out there are not going to protect you. How do you protect yourself?
Florida Uninsured / Underinsured Motorist Coverage
In Florida, you can purchase an additional auto insurance policy, known as, Uninsured / Underinsured Motorist (UM) Coverage. UM coverage is there to protect you when the other driver is uninsured or has insufficient insurance coverage to pay for the damages they have caused to you. That is the situation, in my experience, most of the time.
If you want to ensure that you and your family are protected after an auto accident, it is imperative that you purchase UM coverage.
How much UM coverage should you purchase?
As attorneys who frequently deal with the realities of motor vehicle accidents, our answer is to purchase as much UM coverage as you can reasonably afford. There is an increased cost associated with purchasing UM. You should use your best judgement regarding the amount you purchase.
Stacked UM Insurance
Stacking UM coverage is an added option available to you, that shouldn’t be ignored. Stacking your UM coverage will increase your UM limits, based upon the number of vehicles you are stacking.
UM insurance is sold with limits per person and per accident. Let’s say you purchase an individual UM policy for vehicle 1, with limits of $100,000 per person and $200,000 per accident. Later, you add a second UM policy, with the same limits, for vehicle 2. In this scenario, you are limited to $100,000 in coverage per person and $200,000 per accident. Vehicle 1’s policy UM applies when you’re driving that vehicle and vehicle 2’s policy applies only when you’re driving it.
If you stack your UM coverage for both vehicles, your limits are now $200,000 per person and $400,000 per accident, regardless of which vehicle you’re driving. If you add a third vehicle to the stack, let’s say for your teenager, your limits would increase to $300,000 per person and $600,000 per accident, regardless of the vehicle involved.
In addition, stacked insurance will typically cover you even when you’re not in your car. For instance, if a vehicle hits you while you’re riding a bike, a motorcycle or out jogging, stacked UM will cover you.
For motorcyclists, stacked UM coverage may be the only insurance available to you, if you’re injured by someone else while riding your motorcycle.
Like purchasing UM, there is an increased cost for stacking. If you can afford it, you should stack. If you can’t afford to stack, you should still purchase as much UM as reasonably possible.