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You were recently rear ended by George, the driver of’ a 1985 Toyota Corolla. You went to the hospital complaining of right knee pain, were admitted and had surgery. Two days later, you can’t drive, climb or get around very well; and it’s not going to get better for at least a month. As a Realtor, you’re out of commission (pun intended). Your medical bills are$15,000 and your lost wages are $12,000. Confused, you call your attorney, wondering who is going to pay. When you purchased your policy, your agent said you had “full coverage.” Welcome to the wacky world of Florida’s No-fault insurance scheme.

Like most people, you know you have insurance, but now that you need it, what do you really have? Pull out your automobile declaration page it5 you read this article; and let’s see if you’re happy with what your agent sold you. Florida law requires you to have two components of automobile insurance. Everyone must have $10,000 of personal injury protection (PIP) and $10,000 of property damage (PD) coverage.

PIP comes in two flavors, no deductible and a deductible. If your PIP does not have a deductible; and fortunately, yours did not, your insurance carrier will pay for 80% of your medical bills or 60% of your lost wages, up to a total of’ $10,000. It does not matter whether you apply your PIP coverage to medical bills, lost wages or a combination of both, but once you reach $10,000, PIP is exhausted.

Your insurance company pays these PIP benefits to you or your doctors, regardless of who was at fault, hence “No-fault” insurance. Who pays the remaining 20%? Hold that question for a couple of paragraphs. If you have PIP with a deductible, usually $2,000, you still have the same coverage as above, except, your insurance company will not pay the first $2,000. Who pays that $2,000?

You do! “Butt,” you say, “The accident wasn’t my fault!” Sorry, Florida’s No-Fault scheme figures that by purchasing a deductible you saved on premiums and have recouped your $2,000.

The PD coverage is not par1 of’ the No-fault roll scheme. Unlike PIP, PD pays for the damage you caused to someone else’s property. If you or someone else caused damage to your car. your optional collision insurance “ill pay. subject to the deductible you selected. Alternatively. you can make a claim against the other driver’s carrier.

BMW, Mercedes and Lexus owners beware! The ten thousand in PD coverage gets utilized quickly, so be sure you have collision sufficient to cover your import.

After PIP pays, you have $2,000 in unpaid medical bills and $12,000 in lost wages. Who pays the rest of your $14,000 in economic damages? This is the scary pan. Like the student who rear-ended you, most South Florida drivers only have what Florida requires and nothing more.

lot of drivers have no insurance at all. Bodily inju1y (Bl) coverage pays for the lost wages, medical bills and non-economic damages (pain. disfigurement. lost enjoyment of life) you cause when you negligently operate your car. It is not required (Florida is more concerned about someone paying for your property damage than your broken knee), but as someone who has worked hard, you need this coverage to protect your assets if you cause an accidental injury

Bl coverage always has two numbers, usually expressed with a “/” between the two. Your policy may have $10,000 – $20,000 or $300,000 – $ 500.000.00 or some other combination.  The first number is the maximum amount your carrier will pay any one person. If you hit a car with multiple passengers and you have a I 0/20 policy, your carrier will pay up to $20,000 for the entire claim, but no one person will be paid more than $10,000.

If you purchase BI coverage, Florida requires your insurance carrier to give you an equal amount of uninsured motorist (UM) coverage. UM is son of like PIP. It is the amount of money your carrier will pay you, the occupants or your car and your dependents when someone like George hits you and has no Bl.

Unlike PIP, however, UM only pays when you can prove George was at fault. Since most people have no Bl. I strongly recommend that everyone purchase UM. It is the single most important part of your automobile insurance.

Be careful! When you purchase auto insurance you will be asked if you want to waive UM coverage. Don’t! If you did. you probably did not understand what it was; and were enticed with the idea of saving money on your premiums.

Look at your policy’s declaration page. If you don’t see UM or uninsured motorist coverage listed, you don’t have it. Call your insurance agent at once. If you own two cars, you can combine your UM coverage by purchasing “stacked” coverage.

Fortunately, your agent sold you a policy with UM; and now your insurance company will pay you for the injuries George caused.

There are two other provisions you should know about, both of which are optional. Medical Payments sometimes abbreviated as “Med Pay” will pay your own doctors what is not covered by PIP. It covers the 20% that PIP does not pay, plus

any additional bills, up to the amount of your combined PIP and Med Pay coverage. $5,000 is a standard Med Pay coverage.

You may not want to purchase it if you have a health insurance plan that covers you for what your PIP does not pay. However. it is relatively inexpensive.

Another relatively inexpensive option is additional PIP. If you have $50,000 in PIP and $1 0,000 in Med Pay coverage, your carrier will pay your doctors up to $60,000 for yours and your family’s injuries and lost wages. Given today’s high cost of medical care. you don’t need to be catastrophically injured to insure $60,000 in medical bills.

Driving in South Florida can be frightening. Not understanding your coverage in advance or an accident can be financially debilitating.