When it comes time to get insurance coverage for a vehicle, you will hear a lot of different terms. There are many types of car insurance. It seems that there is an insurance policy available for everything. It all comes with a different name and each will provide coverage for a different circumstance.
For that reason, and to make it easier for you, The Crash Lawyer is here to help. Our goal is simple. We want to take the confusion out for all who have questions.
Liability Coverage (BI)
If you are in a vehicle accident, liability coverage is insurance that will cover you in the event you get sued for the accident. The amount you need depends greatly on what assets you have that could be taken in a court battle. Owning a home, multiple vehicles, a large bank account, may mean that you want to spend more for liability coverage. This way, if you cause an accident, you will not end up losing your home and everything else if sued.
Liability is often sold as a policy in and of itself. Typically, even the most basic liability coverage will extend to property and bodily damage. This may be $100,000 paid for injuries per person, $300,000 total per accident, and up to $50,000 property damage per accident.
Uninsured Motorist Coverage (UM)
Uninsured motorist coverage is designed to protect you in the event that you are involved in an accident where the other driver does not have coverage. Most often, a driver will have at least liability on a vehicle, but this is not always the case. Liability will cover your injuries and vehicle damages if they are at fault.
If they are not covered you could be left paying out of your pocket for your own medical care and vehicle repair. Unless you choose to sue them, but this could take time and prove fruitless if the defendant driver has minimal or no assets. With uninsured motorist coverage, that burden is taken off you and your family. You get the care you need, quickly.
Underinsured Motorist Coverage
Let’s say that the person responsible for the vehicle accident has basic liability coverage that only extends up to $100,000. However, your bodily injuries are going to be more expensive. At this point, they are underinsured for the damages that they caused. If you do not have underinsured motorist coverage, you could easily end up paying for medical or damages that exceed their maximum limits.
Comprehensive Coverage (Acts of God)
What happens if your vehicle is damaged by circumstances that are not within your control. For instance, a tree falls on your vehicle or a deer runs out in front of you? This type of damage cannot be covered by another person because it does not involve another driver. Comprehensive coverage can cover you. It covers virtually every instance where nature or vandalism occurs.
Collision and comprehensive insurances often get confused with one another. One way for you to keep up with their differences is to remember that comprehensive insurance covers things that happen that are not within your control. Collision insurance kicks in when you are driving along and hit a tree or a fence. It covers you if you back into another vehicle.
Collision insurance also covers your vehicle regardless of fault. There is often a deductible that you will be required to pay, but your insurance will cover all damages above and beyond it.
Medical Payments Coverage (Med Pay)
Medical payment coverage insurance is not available in all states. However, if you have it, it can ensure that you or your passengers are covered medically after you are involved in an automobile accident. This insurance is usually optional in most states that offer it. This coverage protects you from medical expenses in excess of the 80% PIP benefits.
Personal Injury Protection (PIP)
PIP Insurance is able to cover you in the event of an accident, regardless of who was at fault for it. It may even help you regain some of your lost wages if you have to miss work because of your injuries. The amount of coverage you need will be based on how much you want. However, generally speaking PIP covers up to 80% of your medical expenses and/or 60% lost wages. You may have a deductible.
Rental Reimbursement Coverage
Every accident comes with expenses, even if you are able to escape personal injury. If you have a vehicle damaged in an accident and you need to rent a vehicle while waiting for repairs, you have to pay. Unless you have rental reimbursement coverage. This coverage will pay you back for the use of a rental vehicle or the price of public transportation.
Transportation Expense Coverage
Transportation expense coverage is the same as rental reimbursement coverage. They both cover your expenses while waiting on your vehicle to be repaired after an accident.
Car insurance, even full coverage may not cover your bank loan to pay off your vehicle if it is stolen or totaled in an accident. Even though it says it will cover the value of your vehicle, it does so based on depreciation values. Gap insurance will cover the “gap” so that you do not get stuck paying a car loan when you no longer have a vehicle. It is considered optional insurance, but if you have a car loan, it is worth it.
New Car Replacement Coverage
If you total a vehicle and have new car replacement coverage, you will receive enough cash to pay for a replacement. This amount is based on the make and model, year, and depreciation of the car.
Towing and Labor Cost Coverage
If you are away from home and end up with a flat tire or a dead battery, towing and labor insurance will cover the cost. It may also cover lockout fees and gas delivery. The cost of a tow for more serious issues will also be covered.
The Fine Print on Florida’s Insurance Requirements (regarding a broken down vehicle.)
You may be wondering, if in the case your vehicle does break down and you are unable to repair it, then do you need to keep insurance on it? Even if you aren’t on the road with it?
As long as the tag on the vehicle is still valid, the answer is yes.
If you plan on no longer using your vehicle, go to your local tag office and have the tag suspended. This will protect your license and you from a potential issue over lapsed insurance.
Keep in mind, if you let your insurance expire, you could face up to three years without driving privileges, or until you have valid proof of Florida insurance coverage. You will also face a reinstatement fee of $150-$500, depending on how many times your license has been suspended.
With the popularity of ride-sharing, insurance is available to cover you. This is basically the same as rental insurance. If you have it, your ride may be covered by your insurance provider.
Sound System Coverage
Some people enjoy upgrading their vehicle. If you have upgraded your vehicle’s sound system, why not protect it from theft or damage? That is what sound system coverage does.
Classic Car Insurance
When you own a classic car, there should never be a depreciation on it. If you total it, you do not want to lose everything you have invested. This is where classic car insurance comes in. It is completely full coverage for your classic car.
Property damage insurance is included with basic insurance. It covers the cost of damages that may occur to another person’s personal property or vehicle.
This coverage is added on to cover more damage than basic property damage liability. It is helpful if your maximum liability payment has already been exhausted and you get sued for even more money from the other driver. It is designed to protect you beyond basic insurance.
Bodily injury insurance is usually added into a basic insurance policy. It covers the cost of another person’s medical bills up to a predetermined amount. This ensures that you do not have to pay out of pocket for their medical costs.
Stay tuned for our Car Insurance Guide Part 2. We’ll cover insurance requirements in Florida, full coverage car insurance, the fine print on insurance policies. Our personal injury lawyers will reveal their personal recommendations of what types of insurance are necessary for Tampa residents.