What is Full Coverage?

There is a common misconception that “full” coverage in Florida provides all the necessary insurance in the event of an automobile collision. However, the term “full coverage,” is a misnomer. Florida law simply requires that every registered vehicle in Florida that travels on the streets and highways maintain two types of insurance: Property Damage and Personal Injury Protection (PIP).

Property damage coverage of $10,000 is the legal minimum required. This type of coverage pays for any damage that you may cause to the property of another due to the use and ownership of your vehicle. For example, if you cause a collision that damages the vehicle of another individual, your insurance company will pay for the damages to that vehicle up to the limit on your insurance policy. While $10,000 is the minimum coverage, you may choose to increase the coverage amount if you wish.

Personal Injury Protection (PIP) is another $10,000 coverage. This coverage protects you in the event you are in a collision. Regardless of who caused the collision, your PIP coverage will pay for medical expenses you incur at a rate of 80% up to $10,000. There are some limitations that are discussed here.

“Full coverage,” will not compensate you for everything in an automobile collision. It will not cover the damage to your vehicle or property. It will not compensate you for noneconomic damages (such as pain and suffering). It will not reimburse medical expenses over the $10,000 threshold. It will not provide you with a rental vehicle in the event your vehicle was damaged and needs to be repaired by an auto mechanic. Furthermore, it will not protect you if you injure someone else in a collision.

You should look over your insurance coverages and make sure you maintain all the coverages that make sense for you. These coverages include comprehensive, collision, rental, gap, bodily injury, and uninsured/underinsured motorist coverage.

Collision and comprehensive coverage help pay for damages to your personal vehicle. Collision covers damages sustained in an automobile collision while comprehensive covers damage sustained by some other incident such as natural disaster or vandalism. These coverages are usually subject to a deductible that you will be responsible for before the insurance company will pay anything.

Rental coverage will pay for a rental vehicle up to a certain dollar amount per day. This dollar amount can be selected by you when you sign up for your insurance policy and chose which coverages you wish to apply.

Gap insurance can sometimes be purchased through your automobile insurance. Some insurance companies do not provide this coverage through their automobile insurance policies and you will need to seek out an independent policy. Gap insurance is important coverage to have if you financed your vehicle. In the event, your vehicle is totaled and you owe more than the fair market value of the vehicle (which frequently happens) this insurance will pay the bank that holds your loan the difference between the fair market value and what is owed on the vehicle. For example, if you owe $10,000 on your vehicle and the fair market value is only $5,000, collision coverage would only make a payment of the fair market value. You would still owe $5,000 on the loan. Gap insurance would pay for this remaining amount.

Bodily injury insurance can protect you financially. If you cause an accident that injures someone else, it is possible that they will seek compensation for those injuries. If you carry bodily injury coverage, this insurance will protect you from the compensation sought by the injured party. It is always a good idea to have some sort of bodily injury policy. If you do not an individual may attempt to pursue your personal assets. They may additionally be able to garnish your wages if you do not possess any protected assets. The minimum coverage you can typically apply to your automobile insurance policy is $10,000.

Uninsured/Underinsured (UM/UIM) coverage is integral for anyone driving a vehicle on the roads and highways of Florida. Florida has an extremely high rate of uninsured drivers compared to other states. If an individual who causes a collision with you does not carry bodily injury coverage on their insurance policy, there may be no other way to obtain compensation for your injuries. This is why you should include UM/UIM insurance on your policy. This coverage is discussed more here.

Oftentimes individuals face financially troubling times after being involved in an automobile collision because they misunderstand what full coverage is. They are not told by the insurance company or agent that they will be responsible for damages to their vehicle, rental expenses, and potentially medical expenses. It is important to make sure you look over your policy and that you have all the insurance coverages that make sense for you.