Are you a Self Insured Driver?
Florida Car Insurance can be Confusing
Believe it or not, you may be considered an uninsured driver in Florida, even if you have car insurance! Any responsible person insures their car, in case of an accident. But, in Florida, the bare minimum insurance does not require you to purchase protection from some very basic accident scenarios. SteinLaw provides important information that every driver in Florida should know. If you’re now wondering “are you a self-insured driver” we can help you answer that question.
Self-insurance involves acquiring a certificate of coverage from the Florida DMV and taking fiscal responsibility for all accident-related expenses for which the motorist is legally liable. Self-insurance can either be a cost-cutting measure or a risky gamble that could financially wipe out the self-insured party.
To begin, if you purchase auto insurance and live in Florida, you will definitely be covered with Personal Injury Protection (PIP) insurance. Every driver in Florida has to purchase PIP car insurance. This covers up to $10,000 of medical expenses related to injuries YOU (the policyholder) sustain from an automobile accident. Yet, there are other situations in which you may not be covered, including the following:
…If the Accident is Your Fault
Bodily Injury Coverage is optional insurance that you can decline while choosing car insurance. Bodily Injury is insurance that covers the OTHER driver if you are at fault for an accident. Rather, if you are at fault for an accident and do not have this coverage, you can be sued by the other driver, or pedestrian, if you caused the accident. This is where many people realize they answer YES to “are you a self insured driver?”. Many people do not know that not carrying bodily injury insurance makes them personally responsible for injuries someone else sustains in an accident they cause.
…The Other Driver Lacks Insurance
Furthermore, if the other driver is at fault, they may not have enough coverage to compensate you for your injuries. First of all, the other driver may not have car insurance, or they may only have the mandatory minimum PIP coverage. You have a second option of purchasing Uninsured Motorist Coverage. This coverage guarantees your protection, past the $10,000 in PIP benefits, if the other driver has inadequate or no insurance. If you do not have this coverage and an uninsured driver causes an accident, you will have a difficult time getting compensation for your injuries.
What Is Self-Insurance?
Self-insurance is a legal, albeit financially risky method to decline automobile insurance. Self-insured motorists agree to pay out-of-pocket for expenses related to automobile accidents in which they are involved. Motorists who opt to self-insure typically operate under the assumption that paying for the costs of automobile accidents over the course of the motorists’ lives are less expensive than the premiums and other costs associated with automobile insurance.
Self-insurance can be a gamble, as a severe automobile accident can cost the self-insured motorists thousands or even millions of dollars in out-of-pocket expenses when the self-insured motorist is deemed responsible for the accident.
Car Insurance vs Self-Insurance
The most significant difference between car insurance and self-insurance is who pays for the expenses related to an automobile accident. Self-insured motorists pay out-of-pockets for all expenses for which they are responsible. Car insurance policies differ wildly from self-insurance with the varieties of coverage that they sell. Basic Personal Injury Protection covers only $10,000 in the case of an accident, but car insurance policies offer services such as higher policy limits and coverage against specific threats and situations such as theft, vandalism, and comprehensive collision damage.
Self-insurance requires a higher pool of personal savings and assets than automobile insurance coverage. Self-insured motorists, however, do not have to pay routine premiums or concern themselves about price hikes after an accident.
Florida’s Rules Regarding Self-Insurance
To qualify for self-insurance, a Florida motorist must provide a notarized financial statement confirming that their net worth is no less than $40,000. The Florida motorist must have both a social security number and a driver’s license, and both must be current and active. The Florida motorist must provide a comprehensive list of all vehicles that they own or lease. Self-insurance certificates are valid for one year, and renewing a self-insurance certificate requires the Florida motorist to submit an updated notarized confirmation of self-worth and a current list of all vehicles that they own or lease.
Know Your Coverage
In the scenarios above, a person can be an uninsured driver EVEN IF they have car insurance. The car insurance they purchase does not cover all situations related to auto accidents. When purchasing insurance, opting out of the two extras described above can leave you with high costs if you are in an accident.
Different Auto Insurance Types in Florida
Florida motorists with automobile insurance policies should consider purchasing additional coverage in addition to the basic $10,000 PIP package. Florida automobile insurance products include, but are not limited to:
- Bodily injury coverage covers expenses related to the injury or death of a motorist and their passengers when another party is at fault for the accident. Bodily injury policies have a maximum payout per person and a maximum payout for the entire accident. Expenses above the policy’s maximum are the responsibility of the at-fault party.
- Uninsured/Underinsured motorist coverage covers a variety of expenses pertaining to accidents where the at-fault party does not have any insurance or lacks sufficient coverage to pay for the costs and damages resulting from the accident. Uninsured/Underinsured policies cover both quantifiable expenses such as lost wages and non-economic damages such as disabilities and extensive suffering.
- Property damage coverage pays for damage inflicted on the policyowner’s vehicle or other property when the other party is at fault for the accident. Property damage is limited in scope, so policyowners should review their coverage before making a purchase or update to their policy.
- Comprehensive coverage pays for expenses from any type of automobile damage other than an automobile accident. Types of covered incidents include fire, theft, and weather damage. Most comprehensive coverage policies have a deductible which requires policyholders to cover the first portion of expenses out-of-pocket. However, higher deductibles typically result in lower premiums.
- Collision coverage pays for the expenses associated with repairing or replacing the policyholder’s vehicle after an accident. Collision coverage pays regardless of which party is as fault in the accident. However, collision coverage pays only for damage to the policyholder’s automobile; no other expenses are addressed by this coverage.
- Gap insurance is a specialized coverage type for policyholders who are leasing their vehicle. In the instance where an accident renders the policyholder’s vehicle unsalvageable, gap insurance will pay the remaining balance on the vehicle’s lease.
- Rental car coverage pays for the cost of a rental car when an accident temporarily renders the policyholder’s owned or leased vehicles unusable due to repairs. Note that rental car coverage covers only the cost of the rental itself; additional expenses such as fuel charges, upgrades, and additional options are not covered by rental car coverage.
- Medical payment coverage pays for the cost of medical expenses for the policyholder and their passengers after an accident. Medical payment coverage pays regardless of which party is at fault. Many types of medical payment coverage also cover the policyholder when they are a pedestrian or operating another vehicle such as a rental car.
- Sound system insurance is a highly-specialized insurance product that covers expenses related to repairing or replacing a vehicle’s sound system after it is damaged or stolen. Like comprehensive coverage, sound system insurance policies carry deductibles.
- Umbrella coverage is an insurance product intended to protect policyholders from expenses from major automobile incidents. Umbrella coverage activates after the policyholder’s automobile policy maximums have been reached. Umbrella coverage policies are often sold in increments of $1 million and are designed to prevent policyholders from losing their net worth or possessions in response to lost wages or legal fees.
SteinLaw specializes in personal injury cases including automobile-related injuries. We represent a wide range of automobile accidents, including car accidents, multi-vehicle accidents, and pedestrian accidents.
If you have been in an accident, no matter who is at fault, SteinLaw’s experienced attorneys can assist you with questions about your accident and help you to recover. Contact a lawyer today to schedule a free case evaluation by calling 877-783-4652 or fill out our online form.