Quite often as a Tampa Personal Injury attorney, I am asked by clients, friends, and family what I recommend as a minimum for car insurance. Figuring out how much car insurance you need to buy can be overwhelming and I write this post knowing you will most likely never need my services, but I’m just writing this to help you navigate complicated insurance coverages. To put it simply: the bare minimum insurance in Florida is not enough. Just say how much! Ok, fine. The short answer is: buy bodily injury and uninsured motorist coverage equivalent to your household income.
As you continue reading, you will see why “full coverage” is not enough coverage for you. I fully recognize that your budget needs to be taken into account, but the purpose of insurance is to protect you and you hope that you do not need to be protected.
Seeking advice and quotes from only one agent could result in you purchasing more coverage than you need, not enough insurance, and possibly at a higher rate than the competition. Why not enough? Because if the agent knows that you are only looking at the bottom line so they cut the non-mandatory coverage in order to bring the monthly payment down.
Why Do I Need Car Insurance?
Car insurance is designed to protect you, your assets, others, and property in the event of a collision, theft, or natural disaster. You are literally transferring “risk” to the insurance company because the insurance companies are in the risk business and they never lose. You pay a little each month for the comfort of knowing that you will not have to pay a large sum in the event of a catastrophe. For a more detailed explanation, check our guide on how car insurance works.
Is Auto Insurance Required in the State of Florida?
Yes, auto insurance is required in the state of Florida. Laws vary from state to state regarding how much and what types of car insurance you need to carry. Most states require drivers to at least carry liability insurance, which pays for the bodily injuries and property damage of others if you’re at fault in an accident. Shockingly, Florida does not require bodily injury coverage or Uninsured motorist coverage.
You can get a ticket, receive a court summons, and face a driver’s license suspension in Florida for not carrying auto insurance.
What is the Minimum Car Insurance Required in Florida?
Florida state law requires you to carry a minimum amount of car insurance. Florida is a no-fault state. That means your insurance will pay your medical claims and lost wages up to a specified limit (usually $10,000), regardless of who caused or is at-fault for the accident. Under a no-fault system, you lose some of your rights to sue for damages.
The bare minimum car insurance requirement for Florida drivers is:
- $10,000 property damage liability
- $10,000 personal injury protection
Florida does not require you to carry additional coverage such as Bodily Injury, Uninsured/Underinsured Motorist, or Collision and Comprehensive. Buying the minimum is not a good idea because it means you are responsible for the injuries to the other party if you are fault and for the other car if you cause more than $10,000 in damages to the other. Don’t think anything bad will happen if you do not have enough? Wrong. More and more insurance companies are suing individuals personally to collect and your driver’s licenses can be suspended if a judgment is awarded.
What Happens if I Don’t Have Car Insurance?
If you’re found driving a car that is not properly insured, there can be many penalties, both criminal and financial, in addition to the loss of personal assets. If you lend your uninsured vehicle to someone, you’re putting yourself at risk, in addition to the person who borrowed your car.
If a police officer stops you for a traffic violation and discovers that you’re driving without car insurance, they may write you a ticket for failing to secure the required level of car insurance. They could also arrest you or impound your car. This type of penalty includes a court appearance where you may need to enter a plea.
What Types of Auto Insurance Is There?
There are five basic types of auto insurance: liability coverage, collision coverage, comprehensive coverage, uninsured motorist, and personal injury protection or medical payments coverage. Other common types of coverage can protect you if you need to rent a car due to an accident, require roadside assistance, or have to pay off a loan on a vehicle that was totaled.
What Is Liability Insurance for Your Car?
When you are at fault, liability insurance compensates the other parties affected in a car accident for their bodily injury and property damage. This can include the driver and passengers of the other vehicle or vehicles involved, injured pedestrians, and the owner of the property where the accident occurred. The important thing to note is that liability coverage does not compensate you or your resident relatives that were in your car at the time of the accident.
Shockingly, Florida does not require liability insurance (only property damage liability). Bodily injury liability coverage pays for medical care, which can include hospital stays, rehabilitation, and long-term care. Property damage liability coverage pays for vehicle repairs or the value of a totaled car. It also pays to fix damaged landscaping, buildings, and other structures.
We suggest buying a policy with more liability coverage than the minimum required. This is because the high costs of healthcare and vehicle repair can quickly add up, and if your coverage isn’t enough, those affected by an accident can take you to court to pay their remaining bills.
Several times in my career, my clients and I have taken properties from at-fault drivers, suspended the at-fault party’s driver’s licenses, and taken payment from the at-fault party.
What is Collision Coverage?
Collision insurance pays for the damage caused to your vehicle in an accident. This type of insurance isn’t required by law, but it’s often required by your lender if you’re leasing or financing a vehicle.
What is Comprehensive Insurance in your car insurance?
Comprehensive insurance pays for other types of damage to your car, like vandalism, theft, flood, hail, and fire damage. Similar to collision insurance, it’s typically required by your lender if you’re leasing or financing a vehicle.
What is Personal Injury Protection (PIP)?
Personal Injury Protection pays for medical bills and lost wages if you, resident relatives, or your passengers are injured in a car accident. This type of coverage is often referred to as “Florida no-fault insurance”, since it covers these costs regardless of who is at fault in the accident. This coverage is required under Florida Statute 627.736. About a dozen “no-fault states” require drivers to have this coverage, including New York, New Jersey, Michigan, Pennsylvania, and Florida. It’s optional in a handful of other states.
How Much Uninsured and Underinsured Motorist Coverage Should I Buy?
Uninsured Motorist coverage pays for your and your passengers’ medical bills and property damage if the driver at fault in an accident does not have insurance or does not have enough insurance to possibly compensate for your bodily injuries. It also applies in the event of a hit-and-run accident. Underinsured Motorist coverage is similar. It covers these expenses when the driver at fault has insufficient liability insurance to do so. Many states require this type of insurance.
How Do Lower My Insurance Rates?
By raising the deductible, you can often lower your monthly insurance payments or premiums. The tradeoff is that you’ll initially pay more out of pocket. For example, let’s say your deductible is $1,000. If you’re in an accident and it costs $5,000 to repair your car, you will have to pay $1,000 before your insurance company pays $4,000.
But is that a good idea? Well, quite often the damages are less than $1,000. Therefore, if your deductible is $500, but you have $800 in damage, you will need to pay the first $500 and the insurance company will pay $300. Hardly seems worth it frankly. Just pay the $800 even if your deductible is $500. It’ll be cheaper in the long run in case they raise your rates.
To be candid, shop around every year, and have no loyalty to your insurance company, they have none to you.
What is Gap Insurance?
With new cars being financed for longer periods of time (5, 6, or even 7 years), Gap Insurance has become even more important. A new car begins to depreciate as soon as you drive it off the dealership lot. This means that you could owe more on your car loan than what the vehicle is actually worth especially if you put very little down. If the car were to be totaled in a crash, you would still have to pay the difference between what the insurance company values the car at and the amount left on your loan. Gap insurance, or guaranteed asset protection, is a type of coverage that pays this difference in the event of a total loss. It’s typically required when you lease or finance a car. In other words, if your car is worth $40,000, but you owe $49,000, you will need to pay the difference, and no, the other party will not pay it. They are only required to pay what the value is, not what you owe.
What is Umbrella Insurance?
Umbrella insurance provides additional liability coverage. It is a supplemental policy that goes into effect after you’ve exhausted other liability policies. It can be helpful if you’re involved in a lawsuit as the result of an accident. These policies are usually only available with coverage of a million dollars or more, and they are designed to benefit drivers with many assets.
Your insurance rates can rise if you’re at fault for a car accident. If you have not been at fault for an accident for at least a year, you may be eligible for a discount on your insurance policy. Forgiveness coverage works like these discounts, offering forgiveness if you cause an accident within the time frame spelled out in your policy. This essentially wipes your record clean and enables coverage cost escalation relief. Generally, you’re only able to use this coverage once.
If your vehicle needs a tow, whether it’s been in an accident or not, you can use roadside assistance coverage to pay for it. Organizations like AAA offer similar roadside assistance services.
Many new vehicles come with warranties that include roadside assistance. Those types of warranties often have strict limits, so do your research to see if you’ll need to supplement that coverage with an additional policy or by subscribing to a service.
Rental Reimbursement Coverage
Rental reimbursement coverage pays for a rental car or another form of transportation when your car is inoperable because of an accident. Also called transportation expense coverage, this type of policy usually has limits as to how much the insurance company will pay per day.
Medical expense coverage is similar to Personal Injury Protection. It covers your medical bills, no matter who is at fault in an accident. However, it does not cover lost wages. This type of insurance is optional in many states. If you already have health insurance, you may find it worthwhile to skip this coverage, as the two policies may overlap and it is costly.
Where should I buy Auto Insurance?
I highly recommend calling around every year to different insurance companies. But I especially recommend you call an insurance broker who will work with different insurance companies. One insurance broker can work with five to eight different insurance companies. We recommend Adrian Fernandez Insurance, AAA, or an online insurance broker.
If you require an attorney after a Tampa Car Accident, call Tampa Injury Attorney Martin Hernandez at 813.755.9500.