How much auto insurance do I need?
Areas of your automobile insurance that you may want to consider reviewing on at least a yearly basis
by Todd W. Henry, Esq.
For many years, I have represented clients in auto accident cases, arguing with insurance companies to make sure my clients are justly compensated for their injuries, lost wages, and pain & suffering. This area of my practice has recently increased dramatically, and I have seen first-hand the serious consequences associated with not having enough insurance.
Auto insurance has four (4) basic components:
- Personal Injury Protection (a/k/a, “PIP” or “No Fault Insurance”)
- Bodily Injury Liability
- Uninsured/Underinsured Motorist Coverage
- Property Damage
Most attorneys will advise you to obtain as much insurance as you can afford in each of these areas. But, sometimes this blanket approach can result in paying unnecessarily higher premiums. By contrast, this article focuses on two (2) specific areas that I have consistently seen to be a problem in auto accident cases. You may want to consider reviewing your auto insurance policy in these two (2) specific areas.
Personal Injury Protection (“PIP”) insurance is the first problem area because most people only have the minimum amount required by law. In Florida, PIP insurance is required in the minimum amount of $10,000.00. It is required by law because it is very important, but it is equally important to have enough. The purpose of PIP is to immediately pay your lost wages and medical expenses regardless of who was at fault in the accident. Unfortunately, in most cases the medical expenses quickly eat up the entire $10,000.00 leaving no money left for lost wages. Also, accident victims are often left with outstanding medical bills soon after an accident, because $10,000.00 is rarely enough to cover the initial medical treatments and diagnostics (x-rays, MRI’s etc.) even when health insurance is used primarily or as a supplement.
Most people are not aware that you can increase your PIP coverage, and consequently it is often left at the minimum amount. This is compounded by the fact that agents and underwriters in big insurance companies do not seem to like people to increase this valuable coverage. In any event, it is advisable to increase your PIP coverage to a minimum of $20,000.00, and the premiums associated with this increase are often affordable.
Uninsured/Underinsured Motorist (“UM”) insurance is the second problem area because it is often ignored or even waived by policyholders. UM insurance covers you in the event that you are injured by someone who does not have auto insurance or is not insured adequately to pay for your injuries. It also pays you in the event you are a victim of a hit-and-run accident. UM insurance coverage should always be maintained at the same amount (or more) as Bodily Injury Liability (“BI”) insurance coverage, which should be based on your net worth and generally never less than $100,000.00.
If you wonder why you should have UM insurance, consider this: According to 2013 U.S. Census data, Florida ranked 2nd in the country for residents without auto insurance – nearly 3.8 million people in Florida are without auto insurance, which equates to approximately 25% of the state population.*
Insurance companies have been known to entice policyholders to sign written waivers of UM coverage by offering lower premium payments. While there is no requirement to have UM insurance in Florida, it is advised as an invaluable part of your auto insurance coverage. In fact, if you think you may have signed a waiver of UM coverage with your insurance company in the past, you should contact your auto insurance agent to reinstate it right away.
For more information on laws pertaining to auto accidents, including the new law requiring you to seek treatment for your injuries within 14 days or lose your rights under your own insurance.