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Glossary




 


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Basic Insurance Requirements

Insurance is important. Each year on Florida’s roads there are more than 250,000 accidents, resulting in 230,000 injuries and 3,000 deaths. Even the safest and most cautious drivers are vulnerable to auto accidents. Your best defense is to have auto insurance.

If your motor vehicle is registered in Florida, you must carry a minimum of

  • $10,000 of personal injury protection (PIP) and
  • $10,000 of property damage liability (PDL).

The Department of Highway Safety and Motor Vehicles does not require you to carry bodily injury liability (BIL) in order to obtain vehicle registration. However, if you are involved in an accident in which the other party is injured, you will be penalized for not having this coverage.

Note: The DHSMV will suspend your driver license, vehicle tag and registration if your insurance company cancels your PIP and PDL coverage and you fail to obtain new coverage. You must then provide proof of insurance and pay a reinstatement fee to get your license, tag and registration reinstated.

PDL: Property Damage Liability

PDL pays for damage (up to the limit of the policy) that you or anyone covered under your policy cause to another person’s property through the use of a covered automobile. It only covers damage for which you or anyone insured under your policy are legally liable. The damage may involve a parked, running or rolling automobile. The term “property” is not limited to another vehicle, and may include a fence, telephone pole, or building. The terms and conditions of your policy determine whether PDL coverage applies to anyone using your vehicle.

PIP: Personal Injury Protection (also called no-fault insurance)

If you are injured by an automobile, PIP covers you up to the limits of the policy, regardless of fault.

PIP coverage includes:

  • 80 percent of “medically necessary” expenses,
  • 60 percent of lost wages,
  • 100 percent of replacement services such as child care, housekeeping or yard work, and
  • $5,000 for death benefits.

For a higher premium, you may (in some cases):

  • amend your PIP to increase medical expenses to 100 percent and lost wages to 80 percent; or
  • increase your minimum limits from $10,000 to $20,000 or more.

Optional Limitations of PIP

When you buy a policy, you have the option to select a deductible and/or exclude disability benefits (loss of wages). A premium reduction will result from the selection of one or both of these options. These changes can apply to you alone or to you and your dependent relatives.

Although your premium will be less if you choose to have a deductible on your PIP coverage, it may not be the best option. That is because you would have to pay the deductible before the insurance company would pay the remainder of the approved claim according to the policy provisions. Your personal health insurance will only pay after the coverage on your automobile policy is exhausted. This means that you could be left with a high out-of-pocket expense if you carry a deductible on your PIP coverage.

An exclusion of disability benefits means that in the event of an accident, lost wages will not be payable. It is advisable that if you or your dependent relatives are employed, you should not elect this exclusion.

PIP Chart

While you should read the policy to see exactly who is covered, this chart will help you determine the type of questions you should ask your agent

(This chart refers to accidents occuring in Florida unless otherwise noted.)

 Your
PIP Covers		 Your
PIP
does
not
cover		 Your PIP
could cover, depending
on your
policy, or the
circumstances
You
X
    
Members of your household who do not own a vehicle of their own    
X
Passengers who do not own an auto, and therefore do not have PIP
X
    
Passengers who own a vehicle but do not have PIP coverage  
X
  
Passengers with their own auto and PIP  
X
  
Licensed drivers who drive your vehicle with your permission*  
X
  
Your child (if a resident of your household) if injured on a school bus ride
X
    
You and members of your household for accidents occurring outside of Florida but within the U.S. or Canada
X
    
You, as a pedestrian or a bicyclist, if you suffer an injury in an accident involving a motor vehicle while in the state of Florida
X
    
You, in someone else’s vehicle
X
    

* When you lend your automobile, you are also lending your insurance. If an accident happens, and the driver of your car is “at fault,” your insurance premiums may be affected.