University of Miami student’s guide to understanding your auto insurance coverage

No doubt about it – automobile insurance policies are confusing. Most consumers have the misunderstanding that their insurance policy will cover them in case of a car accident; and is made all the more distressing when, occasionally, I have to be the one to inform them that they are mistaken. There are complexities to insurance coverage that, if not understood, can lead to being insufficiently protected.

The purpose of this article is to explain some of the basic terms, and several pitfalls that you need to understand when purchasing car insurance.

Your insurance coverage falls into two basic categories – (I) those that protect 3rd parties that you harm; and, (II) coverage that protect you.

Car Insurance Coverage that Protects 3rd Parties – Generally Referred To As The “Liability” Coverages.

Property Damage (“PD”) Liability: Florida law requires a minimum of $10,000.00 in PD coverage. PD covers you if your vehicle damages someone else’s property – (i.e. not your own property, not even the car involved in the actual accident).

Bodily Injury (“BI”) Liability: While Florida does not require BI coverage, to go without it is a huge mistake. BI covers other people’s injuries for which you are held responsible (i.e. their lost wages, medical bills, and pain and suffering). BI is there to protect your personal assets, up to the coverage amount, in the event a judgment is entered against you. In addition, the insurance company will typically provide and pay for an attorney to defend a lawsuit that is brought against you.

But it is important to remember that both BI and PD coverage do not protect you or anyone on your insurance policy if you are injured. They are strictly there to cover others if you cause an accident.

Car Insurance Coverage that Protects You

Personal Injury Protection (“PIP”) Coverage: Florida requires that every insured driver have exactly $10,000.00 in PIP coverage. Generally speaking, PIP covers 80% of medical and funeral expenses, 60% of lost wages, and any other accident-related expense of the insured, passengers in the insured’s automobile and any pedestrians struck by the insured – up to, but not to exceed that $10,000.00 threshold – regardless of who was at fault.

Uninsured Motorist (UM) Coverage: UM is not only our amazing school, it is also a type of insurance coverage. You may be a terrific driver, but that says nothing about everyone else on the road. Very often, especially in South Florida, the other motorist in a car accident has: (a) very limited liability coverage; (b) no liability coverage (according to the Insurance Research Council, about 1 in 6 drivers in Florida have absolutely no coverage at all); or (c) cannot be identified (read: hit and run). In any case, you want a UM policy that will cover the other accident-causing party’s insurance-coverage shortfalls. UM protects you, your passengers and other named persons on the insurance policy for injuries (up to your elected coverage amount). I highly suggest having as much UM coverage as you can afford. In fact, it is so important; your Florida auto-insurance provider is required by law to offer you UM coverage. In order to deny or waive UM, you have to actually sign a statement verifying that you are declining UM coverage on your policy. (Go UM!)

Talk to your car insurance company about adjusting your basic coverages if you now feel you are under-protected. Your insurance representative can also explain some of the other coverage types available to you.

Neufeld, Kleinberg & Pinkiert P.A. serves their injured clients statewide with offices in South and Central Florida. The firm’s attorneys specialize in personal-injury cases, including high-profile automobile negligence and defective-design cases. NK&P’s practice area include automobile and motorcycle accidents; medical malpractice; premises liability; defective products; brain injury; and Reflex Sympathetic Dystrophy (RSD). For more information, visit their Web site at, or call 1-800-379-TEAM (8326)