Two terms used interchangeably from clients regarding their auto insurance are “No-Fault” and “Full Coverage”. These terms are frequently misunderstood. What do they really mean?
Florida is a “No-Fault” State. What does this really mean?
Many assume that because Florida is called a “No-Fault” state, this means that no party is deemed to be at fault for a motor vehicle accident. This could not be further from the truth. Florida is one of the few states in the country that requires “No-Fault” insurance coverage, also known as “Personal Injury Protection”, or “PIP”. The other states that are pure “No-Fault” states are Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah. (Puerto Rico as well.)
Florida’s No-Fault Law means that in the event of an accident, the parties involved will make claims through their own insurance companies, regardless of fault, for these PIP benefits. Florida’s no-fault coverage allows for 80% of medical expenses and 60% of potential lost wages for a combined single limit up to $10,000.00. If you are a passenger involved in a collision, you will go through your own insurance company for PIP benefits. (Unless you do not own a vehicle, but that is another conversation for another time.)
Florida’s No-Fault law can be confusing for individuals, and people can lose their benefits if they do not comply with their polices. For example, a person must seek medical treatment within 14 days of the accident, or they can lose the No-Fault benefits. However, the term “No-Fault” does not mean that no party is at fault for the accident. Florida law does allow the at-fault drivers to be held accountable for their actions, and there are different types of insurance coverages that can cover these losses, which are discussed below.
Do you really have “Full Coverage”?
When clients are asked about their automobile insurance, many of them state they have “full coverage”. Most of the time, this is not true. Many clients believe they have “full coverage” without even knowing which coverages they have purchased, or what these coverages actually mean.
In Florida, there are three main types of coverages for injury claims: 1.) No- Fault/ Personal Injury Protection 2.) Bodily Injury Liability and 3.) Uninsured/Underinsured Motorist Coverage. (Medical Payments coverage may also be available.)
Since PIP coverage has been discussed, the next type of coverage is bodily injury liability, or “BI.” This coverage is designed to cover any injuries or damages to someone caused by you or someone driving your vehicle. (Or any other named insureds on your policy.) Conversely, if you are injured by another party, their bodily injury coverage is the coverage that we will try to recover for you. The available limits on policies vary depending on the amount of premiums paid. It is important to note that at this time, despite efforts by the legislature, Florida law does not require bodily injury coverage.
Since Florida does not require bodily injury coverage, some attorneys recommend getting Uninsured Motorist Coverage, or “UM.” UM is another optional coverage available that will protect insured persons in the event they are injured in an accident caused by a driver that does not carry bodily injury coverage, or any insurance at all. (Unfortunately, this occurs frequently in Florida.) UM coverage is also triggered when a person is injured by an underinsured driver. “Underinsured” means that there is BI coverage available, but the BI limits are insufficient to cover the value of the injuries or damages sustained by the injured party. When UM is triggered, your own UM coverage basically “steps into the shoes” of the at fault party as if they did have bodily injury coverage. It is very important to have UM coverage to protect yourself and your family, because you never know what coverages other drivers have on the road.
There is no perfect definition for the term “Full Coverage.” When clients state they have full coverage, sometimes they only have the required PIP or no-fault coverage. From some perspectives, being fully covered is having all of the coverages listed above, all with substantially high policy limits.
Beggs & Lane represents individuals, families and businesses in catastrophic injury cases. Please contact us if there are any questions regarding your auto insurance policy.