Auto insurance is like a good first aid kit—you never know how much you need it… until you need it.
On February 6 of this year, I was broadsided in the driver’s side by a car that ran a stop sign. My vehicle was a total loss, and I suffered temporary but very painful injuries. At that moment in time, I thought nothing on Earth could be worse than the physical pain I was feeling… I was wrong. The true pain came as I sought reimbursement for my vehicle and compensation for my injuries.
I was transferred by ambulance to a local hospital where I was treated and released. I hobbled home and called my doctor’s office to set up an appointment for the next day. To my surprise, the receptionist told me that my doctor wouldn’t treat me because I was injured in an auto accident. She said that as far as she knew, no primary care physician would treat an auto accident victim.
She gave me a phone number to a company called MedDesk. She told me to contact them and set up an appointment with a clinic that would accept automobile personal injury protection (PIP) as payment. MedDesk asked me where I lived and then gave me a phone number to a nearby health clinic that “specializes in automobile injuries.” I called the number and set up an appointment for the next day.
Three times during my first appointment, I was asked if I had an attorney. After the third prompting, the realization slowly sunk in. I looked at my wife and said, “I think we need to find an attorney.”
Five months following the accident, my case was settled out of court. Looking back, I don’t believe I would have received one penny for my lost vehicle or pain and suffering if I had not hired an attorney to guide me through the bureaucratic maze I had entered. However, I do believe that if I had been properly insured, many of my problems would have been solved much more quickly. Here are the basics you need to be properly insured.
Personal Injury Protection
“PIP is mandatory for anyone who owns a vehicle in the state of Florida,” says Allstate agent Kevin McDonald of the McDonald Agency in Ocala. “Florida is a “no-fault” state, and PIP was created to keep minor injury claims out of the court system. It is basically a $10,000 pool of money that can be used to pay for medical care received from injuries received in an auto accident—no matter whose fault it is. It also has a lost wages and death benefit, if needed.”
McDonald explains that PIP covers anyone injured by an automobile, whether he or she is the driver or a passenger, or even if that person is walking or riding a bicycle.
“Basically, what this means is that you use your own insurance company for the first $10,000 in medical insurance and your PIP covers 80 percent of your medical bills,” he says. “If your medical bills are more than $10,000, then you would either have to pay them yourself if you initiated the accident or you would need to seek restitution from the person responsible.”
My PIP coverage paid for 80 percent of the ambulance service, emergency room care, medical and rehabilitative care, and a CT scan I underwent weeks after the accident. I would have been responsible for the remaining 20 percent, but the entities involved all adjusted their bills accordingly. If you want 100 percent coverage, then talk to your insurance agent concerning med-gap coverage. I kept a meticulous log of all my medical expenses and stopped rehabilitative care on my own after four weeks. At that point, I had totally exhausted my PIP coverage.
“I consider liability to be the most important part of any auto insurance policy,” says McDonald. “It pays if you injure someone or damage their property, and it also pays to represent you legally when you are at fault. For example, if you have $100,000/$300,000 liability, this means that if you cause an accident, your policy pays up to $100,000 per person injured and up to $300,000 total for the entire accident. If medical bills exceed this amount, then you are responsible for payment.”
Many assets, such as your primary residence, annuities, pensions, life insurance, IRAs, disability income, social security and others are protected from being seized or garnisheed in Florida, but wages can be subject to garnishment. Be aware, in Florida, the driver at fault and the owner of the auto involved in the accident (if different from the driver) can be sued for damages relating to a car accident—so be very careful who you allow to drive your vehicle.
“What makes liability important in Florida is that it has two aspects: property damage and bodily injury,” says Xen Stelnicki, a Geico agent in Gainesville’s local office. “By law, drivers are only required to carry property damage liability. This covers damage to the other driver’s vehicle but not medical bills due to injuries. So, if you are involved in an accident with a person who has only property damage liability and the accident is their fault, you may have no other recourse but to sue the other driver for reimbursement of your medical costs.”
I know this one firsthand. The person who hit me had no bodily injury liability insurance. She was delivering flowers at the time she hit me, and that made a world of difference… but not in a good way.
Because she had signed an agreement with her insurance company stating that her car was for personal use only, the company said her policy wasn’t in force at the time of the accident due to her failure to live up to her part of their contract. Under normal circumstances, they would have paid to replace my totaled vehicle. Now, they refused. On top of this, the woman who hit me refused to reveal the name of her employer… and then she disappeared, possibly leaving the country. In order to get any form of restitution, I would have had to sue her personally. My attorney informed me that this type of litigation is very rarely successful, because most persons who carry only the minimum amount of auto insurance usually have very limited financial resources.
Only after my attorney threatened to sue the other insurance company did they finally agree to reimburse me for the loss of my vehicle. I received payment for my Jeep more than 10 weeks after the accident. We were fortunate enough to have a second vehicle, or my wife and I would have had no personal transportation for that time.
My uninsured motorist (UM) coverage saved me. It is not mandatory in Florida, but it should be mandatory for you. Because I could not file a claim against the insurance company of the person who hit me and she was nowhere to be found, I filed a claim against my own insurance company through my uninsured motorist coverage, and they negotiated a pain and suffering settlement with my attorney. They called shortly after settling and informed me that they were suing the woman who hit me to recoup their expenditures.
“In Florida, it is very, very important to carry UM coverage,” says Stelnicki. “There is a huge number of drivers in the state who have no bodily injury liability. Honestly, this is a pretty nasty setup. If someone hurts you in an accident that is their fault and they don’t have bodily injury liability, then you must pay any medical bills that exceed $10,000. That number can be reached quickly with the cost of health care today. If those bills were to run up into the hundreds of thousands of dollars, then you would be responsible for them while your attorney seeks a judgement against the party who hit you. Meanwhile, it is feasible that you could end up having to file for bankruptcy while waiting for a court settlement. UM covers that. It pays medical bills, pain and suffering, lost wages, replacement services and several other things. It doesn’t pay for your vehicle, but either the other driver’s property damage liability or your own collision insurance would do that.”
Stelnicki says that other instances where UM coverage might come into play are if the at-fault driver leaves the scene of the accident or they are driving for a non-covered use (such as delivering flowers in a personal-use-only vehicle).
Stelnicki says to ask your insurance agent about stacked UM coverage if you own more than one vehicle.
I chose not to get rental car insurance on my policy in order to save a few dollars each month. I regret that. While waiting 10 weeks for reimbursement on my totaled Jeep, I had to use my second, somewhat-unreliable car, and it was very inconvenient.
“Rental insurance varies from agency to agency,” says Stelnicki. “At Geico, we offer different per-day rates for different premium costs. Most policies provide a limit of $30 per day for 30 days. It’s hard to find a rental car today, and especially an SUV if you have a family, that costs just $30 per day. We offer $50 per day up to $1,500 per accident coverage, and that is closer to today’s rental prices. Make sure your policy covers you adequately for rental car reimbursement.”
“If your vehicle collides with an object or if an object collides into you, that is when collision comes into play,” says Terri Parramore, the auto and financial service specialist at Angie Lewis State Farm in Ocala. “If you’re driving and you hit another vehicle, if another driver’s vehicle hits you, if you back up into a tree or if a vehicle should back into you in a parking lot while you’re inside shopping—these are all examples of collision.”
Parramore says that there are instances where fault for the collision can be placed on an individual driver and times that it cannot be determined who is at fault. If fault can be determined, then the driver at fault may see an increase in their insurance premium, so it pays to be a careful driver.
“Collision insurance is used to pay for repairs to your vehicle following an accident,” she says. “Generally, the cost of your premium is based on the deductible you choose, with higher deductibles costing less. The deductible is the amount you will pay out of pocket before your insurance finishes paying repair costs. We offer deductibles ranging from $50 to $2,000. When deciding to purchase collision insurance, you should carefully consider how much your vehicle is worth. Newer, more expensive cars would be more ideal for collision insurance than older models with a lot of miles on them.”
I was driving my older Jeep at the time of the accident, and I had no collision insurance in force on my policy. If I had chosen to keep collision, my insurance company would have paid for my vehicle promptly and then recouped their money from the insurance company of the woman who hit me—or possibly from her. Think carefully before dropping collision insurance on your aging vehicle.
“Fire, theft, windshield loss, vandalism, animal collision and being struck by falling or flying objects is covered by comprehensive insurance,” Parramore says. “In Florida, we have hurricanes and hurricanes produce falling trees and flying debris; this type of damage would be covered by comprehensive.”
Like collision, comprehensive also has a deductible. With State Farm it can be as low as $0 or as high as $2,000.
Parramore says collision and comprehensive go hand-in-hand. She explains that if an object flies out of a truck bed and hits your car, this is covered by comprehensive insurance. If that object flies out of the truck bed and comes to rest on the roadway and you then drive into it, this would be covered by collision insurance. Either way, repairs to your vehicle would be covered.
I can’t stress how important it is to have adequate auto insurance. I came very close to losing more than $20,000 in property and medical bills—and I thought I was adequately covered. If I had been at fault, I could have lost hundreds of thousands of dollars and watched years of careful financial planning go down the drain.
In order to protect yourself and your family, make sure you have more than enough bodily injury liability and UM coverage. It also pays to have adequate collision and comprehensive coverage if your vehicle isn’t easily replaced. Hope for the best, and plan for the worst, and remember, auto insurance can literally save your financial life.