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Personal automobile insurance covers private passenger vehicles. It provides protection against economic loss to an insured from bodily injury or property damage to others (liability) arising from the operation, maintenance, or use of a covered automobile. Coverage may also be purchased for damage to vehicles owned by you (Collision & Other than Collision).

Common Coverages Available in Florida

When shopping for a policy, beware of terms such as “full coverage” and “what’s required.” What one considers “full coverage” or “what’s required” may differ from one person to the next. You should determine the type and amount of insurance you need. The following is the most common coverage available in Florida.

Bodily Injury Liability (BI) Coverage: pays for death or serious and permanent injury to others when you are legally liable for those damages. If you are sued, the insurer will provide legal representation until the insurer has paid the policy coverage limit.

Property Damage Liability (PD) Coverage: pays for damage to, or destruction of, tangible property of another, including loss of use, for which you are determined to be legally liable. If you are sued, the insurer will provide legal representation until the insurer has paid the policy coverage limit. Florida law requires a minimum of $10,000 of this type of coverage.

Personal Injury Protection (PIP) Coverage: pays 80 percent of all necessary and reasonable medical expenses incurred as a result of a covered injury, regardless of liability. This includes medically necessary medical, surgical, x-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services. Payment is based on the fact an individual receives initial services and care within 14-days after the motor vehicle accident. Follow-up care is contingent on the covered person being diagnosed with an emergency medical injury. PIP also pays 60 percent of work loss and a $5,000 death benefit. The $5,000 death benefit is an additional amount of insurance.

Uninsured/Underinsured Motorist (UM) Coverage: pays you for an accidental bodily injury, sickness, or disease, including death, when such an injury is the result of an automobile accident and the at-fault party does not have Bodily Injury (BI) Coverage, or has insufficient liability limits. Unlike PIP benefits, UM benefits are typically paid as a lump sum once the full extent of treatment has been determined, or rendered.

Medical Payments (Med Pay) Coverage: pays for your reasonable expenses for necessary medical and/or funeral services due to a bodily injury or death sustained in an automobile accident, regardless of fault.

Comprehensive or Other than Collision Coverage: pays for damage to a vehicle from incidents other than a collision including: fire, theft, windstorm, vandalism or flood. It also covers damages caused by falling objects or from hitting an animal.

Collision Coverage: pays to repair your vehicle if it collides with another vehicle, flips over, or crashes into an object (except animals), regardless of fault. In the event that your vehicle is determined to be a total loss, the insurer will pay to replace it. The amount paid by the insurer is typically limited to the vehicle’s actual cash value (ACV), unless the specific value of the vehicle has been previously agreed to by both you and the insurer.

Towing & Labor Coverage: provides coverage for emergency road service (at the scene) and towing up to the limits shown on the policy.

Rental Reimbursement: provides for replacement transportation up to a specified limit shown on the policy. It applies if your vehicle is inoperable, or unsafe to operate following a covered loss. Some insurance companies will pay the rental vehicle provider directly, however others require that their insured pay the rental cost out of pocket, and submit receipts for reimbursement.

Most Common Concerns

Claim Delay: Although Florida law does not address a timeframe for an insurer to settle a claim, 30 days is normally ample time. Unavoidable delays may occur if more than two (2) vehicles are involved in the same accident, or the loss involves multiple claimants. The more vehicles involved, the more difficult to assign liability. Also, when multiple claimants are involved and there are questions as to whether the liable party’s PD coverage limit will be sufficient to pay for all of the damage, most insurers will not pay any claimant until the full extent of the damage is determined, including estimates (or demands) from all involved parties. If the liable party’s PD coverage is not sufficient to pay for the damage to all claimants, the liable party’s insurer will pay on a pro-rata basis.

Claim Denial: Insurers must provide you written notice if your claim is denied. If you have additional information that contradicts the insurer’s position, you should provide the additional information to them for consideration. If you cannot reach an agreement with the insurer, you may be eligible for automobile mediation facilitated by the Department of Financial Services. For additional information, please see the following website: https://www.myfloridacfo.com/Division/Consumers/Mediation/default.htm.

Unsatisfactory Settlement Offer: If you feel the insurer is not providing enough money to repair or replace your vehicle, do your homework. You must provide the insurer with documentation to substantiate your request for additional funds. Please keep in mind you have the right to negotiate with the insurer. If you cannot reach an agreement with the insurer, you may be eligible for mediation. For additional information, please see the following website: https://www.myfloridacfo.com/Division/Consumers/Mediation/default.htm.

Diminished Value: Florida law is silent regarding how a valuation of loss is made concerning diminished value. Florida courts have agreed this may be a covered loss in a third party PD claim but not a first party physical damage claim. The claimant is responsible for providing proof of his/her loss to the insurer.

Non-Disclosed Operators: Most applications for insurance ask for information regarding all residents of the insured’s household, as well as any individuals that have regular usage of the insured vehicles. If this information is not provided on the application and later an undisclosed operator is involved in an accident, the insurer may deny the claim and cancel the contract for material misrepresentation. Some policies allow permissive use of an insured vehicle as long as the operator doesn’t live with you or have regular use of your vehicle(s). You should always check your policy to determine who is covered to use your vehicle(s), since some policies cover only the operators listed in the policy.

Cancellation: An auto insurer has 60 days to decide whether or not to extend coverage to an applicant. After the initial 60 days, Florida law limits the insurer’s ability to cancel the contract. Similarly, Florida law prohibits you from cancelling an automobile policy during the first 60 days unless the vehicle is destroyed, the vehicle is sold, or replacement insurance coverage is obtained.

Nonrenewal: If an auto insurer decides not to continue your insurance at renewal, they must provide an advance notice of at least 45-days.

Premium Refunds: According to Section 627.7283, Florida Statutes, when an insurance company cancels a policy, any unearned premium must be returned to the insured within 15 days after the effective date of the cancellation. The insurance company must refund 100 percent of the unearned premium.

If the premium is financed with a Premium Finance Company, the unearned premium must first be returned to the Premium Finance Company which will delay receipt by the insured.

Per Florida Administrative Code: 69O-170.010, if the insured cancels a policy mid-term, any unearned premium must be returned to the insured within 30 days after the effective date of cancellation. The insurer may retain 10 percent (short rate cancellation) of the unearned premium, unless the request is from a military service member being called to active duty, in which case the insurer must refund 100%.
The insurance company must pay 8 percent interest on overdue refunds.

Insurance Tips

Verify before you buy!!!! Contact us to verify the license of the agent and the insurance company before you sign the application for a policy.

Automobile Insurance Guides: The guides are excellent tools to gain a better understanding of all the coverage and limitations of automobile insurance.

Review your policy carefully!!!! Make sure you have all the coverage you need.

- Understand your responsibilities in the event of an accident.
- Make sure you are covered if you drive someone else’s vehicle.
- Make sure a person you give permission to use your vehicle will be covered.

Ask for car insurance discounts: Contact your insurance provider to take advantage of all available discounts. Certain discounts must be self-reported by the consumer. We recommend you check with your insurance providers each year to confirm your qualifying discounts.

The following life events may result in discounted rates:

  • Getting married – Statistics have shown that single drivers are twice as likely to be involved in an accident as married drivers.
  • Lowering your annual mileage – If you moved closer to your workplace, have joined a car pool, or are a senior driver that recently retired and are driving less annually, you may be eligible for reduced rates.
  • Good student – Students who can prove receiving a B average in their classes are typically rewarded with lower rates.
  • Occupational discounts – If you are employed as a teacher, nurse, accountant, or if you serve in the armed forces, you may be eligible for discounts. These specific occupations have a statistically lower-risk of being involved in accidents.
Definitions

Accidental Death & Dismemberment: Covers an insured for accidental death or dismemberment in an automobile accident, regardless of fault. This coverage pays up to the policy limits.

Actual Cash Value (ACV): ACV is the cost to replace a vehicle. Section 626.9743(5), Florida Statutes lists a number of methods or sources which may be used to determine the ACV of a particular pre-owned vehicle, including the cost of two (2) or more comparable vehicles, the retail cost as listed by a motor vehicle industry electronic database or guidebook, or the retail cost using two (2) or more quotations from local automobile dealers. Since the aforementioned methods of determining ACV will produce varying results, the process is subject to a significant degree of subjectivity.

After Market Parts: An after-market part is a replacement for any of the non-mechanical sheet metal or plastic parts which generally constitute the exterior of a motor vehicle, but can include inner and outer panels. They are parts that are not manufactured by the original automobile manufacturer. This is regulated by the Florida Department of Agriculture and Consumer Services, and is referenced in Florida Statute 501.32.

Betterment: An improvement that adds value to the auto. (i.e. a company replaces a five (5)-year old used part with a seven (7)-year life expectancy with a brand new part.)

Cancellation: An automobile policy cancellation is the termination of an insurance policy before its normal termination date. A notice of cancellation must be mailed to the first named insured’s last known address on file and provide at least 45-days advance notice. For a cancellation due to nonpayment of premium, an insurance company is required to issue a 10-day notice of cancellation. The cancellation notices must include the specific reason for the termination of the policy in compliance with F.S. 627.4091. The notice must advise the insured of possible eligibility for coverage in the Florida Joint Underwriting Association (the insurer of last resort).

Comparative Negligence: This means that each party can share in the negligence (fault/liability) that caused the accident.

Customized Equipment: Items added to a vehicle after it has been released from the manufacturer. This equipment can be covered on an automobile policy by endorsement only, which requires the purchase of additional coverage.

Depreciation: A decrease or loss in value because of wear, tear, age, or other causes.

Diminished Value: Diminution in value (DIV), more commonly known as diminished value, describes the theoretical and/or perceived loss of a vehicle’s value resulting from its involvement in a traffic crash, after the collision damage has been repaired. In as much as the value of any vehicle is subject to a significant degree of speculation, opinion, and subjectivity, quantifying such an amount is allusive at best. In addition, Florida Statute does not directly address, or otherwise recognize DIV, nor does it specify any acceptable, or definitive method(s) of calculating it. The burden of proof that DIV exists after proper repairs to a vehicle have been effected, and if it does exist, to what extent, lies with the claimant. Finally, in as much as any potential diminution in value is only realized when the vehicle is sold, it is an amount which continues to decrease with the passing of time.

Examination Under Oath (EUO): Is a part of some claim investigations. If an insurance company finds it necessary to officially document the statements of an individual involved in a particular loss, they may request an EUO. The EUO may be conducted by the insurance company’s attorney and the process could take several hours. If you are subjected to an EUO, you may wish to seek the advice of legal counsel. Refusal to cooperate in an EUO may potentially result in the denial of the claim.

Force Placed Insurance: Coverage placed by a lienholder when the purchaser of a vehicle fails to meet the coverage requirements contained in the loan agreement.
Independent Medical Exam (IME): The insurer has a right to request an independent medical exam. The request for this exam may be for several reasons. It may be used to determine whether the patient has reached maximum medical improvement and to determine the percentage of total or partial disability. An exam may be requested to obtain a second opinion regarding the medical condition or treatment of the patient. The insurer’s request for this exam should not stop payments for PIP benefits until it’s finalized and the report is received by the insurer. However, if the patient refuses the IME, benefits may be terminated. The statutory reference for the IME is included in Section 627.736, Florida Statutes.

Automobile Mediation: A voluntary program that is available to anyone filing a claim with an insurance company for property damage of any dollar amount, or for bodily injuries up to $10,000, which includes injuries covered under PIP. Either party (consumer or insurance company) may request mediation of the claim prior to the institution of litigation or the appraisal process. The insured may have an attorney present but must notify the company in advance.

Mediation is non-binding and neither the consumer nor the insurance company is legally obligated to accept an offer that they consider unsatisfactory. If a settlement is reached, the consumer has three days in which to change their mind as long as the check has not been cashed.

Both first party claims (claims against your insurance company) and third party claims (claims against the other party's insurance company) are eligible for mediation. The cost of mediation is $100. More information regarding this program is available on our website at: https://www.myfloridacfo.com/Division/Consumers/Mediation/default.htm

Independent Medical Exam (IME): The insurer has a right to request an independent medical exam. The request for this exam may be for several reasons. It may be used to determine whether the patient has reached maximum medical improvement and to determine the percentage of total or partial disability. An exam may be requested to obtain a second opinion regarding the medical condition or treatment of the patient. The insurer’s request for this exam should not stop payments for PIP benefits until it’s finalized and the report is received by the insurer. However, if the patient refuses the IME, benefits may be terminated. The statutory reference for the IME is included in Section 627.736, Florida Statutes.

Non-Renewal: A non-renewal is the conclusion of an insurance policy at its scheduled expiration date, followed by the insurance company’s refusal to renew coverage for a subsequent policy term. A notice of non-renewal must be mailed to the first named insured’s last known address, and provide at least 45 days of advanced notice.

Non-renewal notices must include the specific reason the policy will not be renewed. The statutory reference for the provisions associated with the non-renewal of a policy are included in Section 627.4091, Florida Statutes. The notice must advise the insured of possible eligibility for coverage in the Florida Automobile Joint Underwriting Association (the insurer of last resort).

Pre-Insurance Inspection: Section 627.744, Florida Statutes, requires that in order for a policy to include physical damage (Collision, Comprehensive) coverage, vehicles in the counties of Duval, Palm Beach, Broward, Dade, Orange, Hillsborough and Pinellas must be inspected for existing physical damage. Although Florida law only addresses these counties, it is common for insurers to require inspections of vehicles located in other counties as a precondition to including Physical Damage coverage.

Reservation of Rights: When an insurance company discovers, or identifies a possible claim defense (a reason to deny the claim) during the course of a claim investigation, it is required to notify its insured (policyholder) that it is continuing its investigation under a Reservation of Rights. In some cases, the insurer may suspect a breach of policy conditions by the insured, often involving a failure to cooperate with its claim investigation, or a material misrepresentation. The notice is sent to notify the insured that the insurer may investigate the claim without admitting liability, or waiving any of its rights under the policy.

If an insurer investigates a question of coverage, they must send the insured a Reservation of Rights letter within 30 days after they knew, or should have known of the potential coverage defense. If the insurer fails to do so, they cannot deny coverage based on the coverage defense.

Stacked/Non-Stacked UM: Florida law requires that a company add together, or "stack" Uninsured/ Underinsured (UM) coverage unless otherwise rejected in writing. For example, if an insured has three vehicles, and each has a UM limit of 50/100 ($50,000 per person/$100,000 per accident) those limits are added together, resulting in coverage totaling $150,000 per person/$300,000 per accident. If an insured chooses not to stack their UM Coverage limits (non-stacked), an Uninsured/Underinsured Motorist Rejection form must be completed, and provided to the insurer. Since policy provisions vary by insurance company, you should contact your insurance agent or company to determine whether carrying your UM coverage in a stacked, or non-stacked manner best suits your particular insurance needs. You should also determine the cost difference, if any, between stacked and non-stacked UM. The Florida Statute to reference is 627.727.

Total Loss: A vehicle is a total loss when an insurer pays the policyholder to replace the damaged (or stolen) vehicle with one of like kind and quality. No specific ratio of the damage repair cost, as compared to the vehicle’s actual cash value, is stipulated in Florida law, which determines when a vehicle is deemed a total loss.

The definition of a total loss and requirements of such is addressed in Section 319.30, Florida Statutes. This statute is overseen by the Department of Highway Safety & Motor Vehicles and includes directions for submitting the title of a ”total loss vehicle”.

Contact Us or File a Complaint

Should you need additional information, you may speak with an Insurance Specialist between the hours of 8:00 AM and 5:00 PM, Monday-Friday at one of the telephone numbers listed below:

1-877-MY-FL-CFO (1-877-693-5236)

Out of State Callers: (850) 413-3089

You can also contact us for assistance anytime by email at Consumer.Services@MyFloridaCFO.com. or via our website www.myfloridacfo.com/division/consumers.