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How to Navigate Confusing Auto Insurance Rules and Options

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Without a map of the basics of automobile insurance coverage, shopping for auto insurance can be a minefield of confusing clauses and unfamiliar provisions. Florida auto insurance laws spell out mandatory minimum coverage, but there are numerous additional coverage options. Certainly you should assess how much premium you can afford, and consider your ability to pay up‐front deductibles, out of pocket medical expenses, and rental car fees. But your major consideration should be what kind of insurance coverage will serve you and your family best if the unexpected happens and you are in a catastrophic auto accident.

How to Navigate Confusing Auto Insurance Rules and Options

Always consult an insurance professional when trying to determine whether you have the appropriate coverage and whether you have coverage in sufficient amounts.

Here are some guidelines for decoding auto insurance lingo and choosing the coverage that provides both financial protection and peace of mind. You might also want to consult the Florida Department of Highway Safety and Motor Vehicles for additional resources.

First, you must make sure that you protect yourself and your family. The label “full coverage” can be misleading, and is used frequently in Florida to describe your minimum required financial responsibility. This minimum requirement includes Personal Injury Protection (PIP), which typically pays 80% of medical bills, 60% of lost wages up to $10,000, and property damage liability up to $10,000 for your legal liability for damage to another person’s vehicle or property.

In this difficult economy, many motorists purchase a “basic” insurance policy with these required minimum limits, but reject bodily injury liability coverage because they cannot afford the premiums. “Bodily injury coverage” pays on your behalf for permanent injury or death caused to others by your negligence, and also provides a defense to you in the event that you are sued by the person believed to be wronged by you. While it is understandable that premiums charged for bodily injury coverage may seem unaffordable, it is important to look at the whole picture.

If your negligence accidentally injures someone in an auto crash, can you afford to defend yourself in a subsequent lawsuit? Do you own assets that could be attached by someone obtaining a verdict against you? Can you afford to pay for someone else’s injuries beyond the “basic” $10,000?  Do you simply want to “walk away” from someone injured as a result of something you accidentally, but negligently, did? Purchasing basic limits of $10,000 in bodily injury coverage could expose you to the loss of assets, the need to pay for an attorney to defend a lawsuit, and other financial calamities.

Before you buy an auto insurance policy, you should review, as well, what your own protection needs might be if you or a family member is injured in a car accident.

  • If you should have an accident, regardless of fault, what can you afford to pay for what may be considerable out‐of‐pocket costs?
  • How much insurance do you need to protect yourself and your family in case you are involved in a collision with an uninsured or underinsured motorist?
  • If you are unable to work, do you have sufficient savings or other sources of income to support your family?
  • If you choose not to purchase supplemental medical payments coverage, does your health insurance provide supplemental coverage for auto accident‐related treatment?
  • How much money out of your monthly budget can you afford to allocate towards automobile insurance?

You should also give some serious thought to how much insurance coverage you would need if you or someone else on your policy were injured by another motorist who has only “basic” bodily injury liability coverage — or none at all. In these types of cases, Florida’s uninsured/underinsured motorist coverage provisions would apply.

Uninsured/underinsured motorist (UM/UIM) coverage is an important and essential coverage that is too often overlooked. UM/UIM coverage is purchased to protect you, your family members or other passengers in your car in How to Navigate Confusing Auto Insurance Rules and Options the event of injuries caused by a negligent uninsured or underinsured owner or driver of another vehicle. When automobile insurance consumers purchase UM/UIM, they face another choice, one that is unique to UM/UIM coverage. The question for the consumer is, “To stack or not to stack?”

Florida Law requires that you be permitted to purchase uninsured/underinsured motorist (UM/UIM) coverage in limits no higher than your own bodily injury liability coverage. This is, by definition, “non‐stacked” UM/UIM coverage. However, you may elect to “stack” uninsured/underinsured motorist coverage. “Stacking” is a term used to multiply your UM/UIM coverage by the number of vehicles in your household you insure. But even if you just own one car, stacking can provide additional coverage when you are a passenger in another vehicle you do not own.

While the two terms are puzzling at first glance, a little information goes a long way toward understanding the similarities and differences of stacked and non‐stacked UM/UIM coverage.

Here are some ways in which your coverage is the same, whether stacked or non-stacked:

  • In both cases, “an insured” means the person named, a resident spouse, and related family members who live in the same household, such as your children. Other persons who occupy your covered automobile also count as “an insured” for purposes of UM/UIM coverage.
  • Both stacked and non‐stacked coverage allow you to collect on UM/UIM coverage when you are driving or occupying a car that you own and insure, and when you, spouse or other insured family member is in a car you do not own. You would be covered, for example, if one of you rents a car or borrows a friend’s car and is injured by an uninsured motorist.
  • Stacked and non‐stacked coverage apply equally when an insured is out of state, is on a business errand or in a vehicle owned by an employer, is on a non‐owned motorcycle, or is struck as a pedestrian by an uninsured motorist.

There are some differences between stacked and non‐stacked UM coverage that could have an impact upon your decision about what to purchase. One difference is that an insured with non‐stacked UM/UIM coverage on a primary vehicle cannot collect under this coverage if injured in an accident with an uninsured motorist while occupying a second owned vehicle. In other words, if you purchase non‐stacked UM/UIM coverage for your primary vehicle and then purchase another car in your name, your UM/UIM coverage does not apply to the second car unless you have opted specifically for stacked coverage.

Here are some examples of situations where you may need stacked coverage in order to benefit from the UM/UIM coverage:

  • Say, you own an old, unlicensed car and decide to take advantage of the Cash for Clunkers program. On the way to the dealership, a collision occurs with an uninsured motorist and you are injured. Unless you have stacked UM/UIM coverage, your injuries are not covered.
  • If you are a “snowbird” who insures one vehicle in Florida under non‐stacked UM/UIM and you own another vehicle up north, your Florida policy will not cover you if you should have an accident in the northern vehicle with an uninsured motorist. If your Florida policy includes stacked coverage, however, your injuries would be covered.
  • As the owner of both a car and a motorcycle, you could purchase a separate motorcycle policy but reject the UM/UIM coverage because of the cost. If your auto insurance policy includes stacked UM/UIM coverage, you are covered if you are in a motorcycle accident with an uninsured motorist. But if your auto policy is non‐stacked, you’re out of luck.

The primary point here is that your decision about auto insurance should be based on more than the cost of premiums. The financial consequences of a catastrophic vehicle accident could be far more devastating than straining the monthly budget in order to protect you and your family. Knowledge is power.

Some people tell themselves that if they are involved in an accident, it will be someone else’s fault and the other motorist’s insurance will provide ample reimbursement. This is a high‐stakes gamble that is not only irresponsible, but often simply wrong, and almost always disastrous when an accident with injuries occurs. Protecting yourself and your family requires an accurate assessment of your financial situation, realistic planning for the unforeseen, and collaboration with an experienced insurance agent who can guide you to an informed decision.

When an accident happens, its impact goes far beyond just repairing your car and seeking immediate medical help. Serious injuries may prevent you from working for prolonged periods of time. You could be faced with major medical bills and loss of earnings.

Regardless of your auto insurance choice, if you or a family member is involved in a vehicle accident, you may need assistance sorting out your policy coverages and your rights to seek compensation through the justice system. Attorneys at Searcy Denney Scarola Barnhart & Shipley have more than 45 years experience pursuing motor vehicle accident claims involving deaths and injuries. If you would like more information or a free initial consultation, please telephone our firm at 800‐780‐8607 or fill out the contact form on this page.


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