What Does Full Coverage Really Mean?
While our greatest joy is giving good news to clients, too often we are tasked to disappoint and end up popping their “full coverage” bubble. It’s becoming more apparent that most people feel protected under the guise of the “full coverage” blanket sold by many major insurers today. My goal here is to shed some light on common coverage confusion and make recommendations on what you really need to protect you and your family, and to put to rest that there is any meaning to the term “full coverage.” It is meaningless. If an agent tells you that leave and buy from someone else.
The ever popular term “full coverage” has come to cause confusion with regard to what is actually being purchased when you ask for it. If you have ever financed a vehicle, you have likely been required to show proof of the required coverage to get approved for financing, and therefore purchasing, the vehicle. As you can imagine, dealerships and finance companies are only in the business of caring about coverage providing benefits to repair or replace vehicles being financed. “Full coverage” to them may only mean coverage for damages and replacement of the vehicle you are purchasing since it is collateral for the loan. This coverage may very well not extend benefits to repair or replace property that you may cause damage to in an accident, or for injuries you sustain.
There are many types of coverage available in the State of Florida. The only coverages a car owner is required to purchase is Property Damage (PD) and Personal Injury Protection (PIP).
The other primary automobile coverages that are available include Comprehensive (Comp), Collision (Coll), Uninsured/Underinsured Motorist (UM), Medical Payments (MP or MedPay), and Bodily Injury (BI). I know that sounds complex.
Here is a quick summary for those coverages:
Vehicle Coverages:
Comp/Collision Coverage - think - "MY vehicle."
PD Coverage - think - "THEIR vehicle."
Injury Coverages:
PIP/UM/MP Coverage - think - "MY body."
BI Coverage - think - "THEIR body."
If you purchase Bodily Injury coverage (“BI”) on your insurance policy, those benefits can go toward compensating individuals for injuries you caused them in an accident. BI coverage can be purchased in many different increments. It is recommended that you purchased BI coverage in an amount that protects your personal assets from exposure in the event you injure someone in an accident. The amount of the BI coverage you purchase is the maximum amount of monetary compensation an injured claimant can request from your insurance company. If the value of their injuries exceeds the amount of your BI coverage, they may seek additional monetary compensation against you personally. If they prevail in court, or through settlement, your personal assets may be at risk. BI coverage is elective in Florida so, be sure to add it to your insurance policy to protect your assets.
On the reverse spectrum, if you are injured in an accident caused by someone else’s negligence, you will want to have Uninsured/Underinsured Motorist coverage (“UM”) on your policy. This coverage comes into play when the person that hit you has zero or insufficient BI coverage to compensate you for your injuries the other driver caused. It is designed to protect you and the loved ones that travel in your vehicle should there be a crash and the other driver is not properly insured. UM coverage is elective in Florida, but it is very important if you can afford it. Be sure to speak with your agent about adding it to your policy to fall back on in case it is needed.
Med Pay and PIP cover your own medical bills should you be in a crash. This is true regardless of who is at fault. Because of this people often say that Florida is a No Fault state, but that is really not true. We do have PIP, which is a No Fault coverage, and only valued at $10,000 (an amount set in 1974 and never changed by the Florida Legislature) but the rest of our laws place the responsibility for compensating the injured persons on the at fault driver and owner.
Finally Collision coverage will pay for damages to your vehicle caused by another driver that either has no PD (even though Florida law requires it not everyone has insurance), or sometimes they have insufficient PD. Comprehensive on the other hand will pay for damages to your vehicle caused by other issues other than a crash. For example, if a tree falls on your car, or it is damaged in a fire, comprehensive will compensate you for the damages sustained to the vehicle in those instances.
In the end you can see that “full coverage” is meaningless. What is meaningful is knowing what coverages are available to you and what you need, and of course, what you can afford.
If you are unsure what coverages you have or want a personal injury attorney near you feel free to reach out to Law Office of Mark A. Cornelius, P.A. and we will be glad to assist.