Friday, March 24, 2017

How Auto Insurance Claims Work in Florida

If you drive a car, you are required by law in all 50 states and the District of Columbia to carry insurance to cover accidents. The amount of insurance you are required to have varies by state, but every state has a minimum amount of insurance you are required to purchase. In this legal landscape, two types of auto insurance systems have developed: fault systems (also known as “liability systems”) and no-fault systems (also known as “PIP systems”). Florida is a no-fault system.

Fault Systems vs. No-Fault Systems

The vast majority of states use fault systems, or, as they are more commonly known, “liability” systems. Under these types of insurance systems, the insurance company of the driver who is found to be at fault for the accident pays for the other driver’s losses. An example of the typical types of coverages used in liability systems is below:

  • $5,000 per person toward injury-related costs
  • $15,000 per accident toward injury-related costs (if more than one person is injured)
  • $10,000 per accident in property damage costs

Note that these amounts are paid to the driver who is not at fault for the accident. If you are found to be at fault and you are injured or your car is damaged, your insurance pays for your injuries with medical payments coverage and your property damage with collision coverage, both of which are usually optional add-ons to the above minimum coverages. At their heart, liability systems are concerned with fault—thus, in these systems, litigation is common after car accidents to determine who was at fault for the accident and whose insurance company must pay.

No-fault insurance systems are not concerned about determinations of fault in an accident, as their name would suggest. The policies issued in jurisdictions that follow no-fault systems are known as “personal injury protection” (PIP) policies, and they cover any injuries to the policyholder resulting from an accident regardless of fault. Thus, in states that use PIP systems, each driver’s insurance company pays for its own policyholder’s injuries and damages. After an accident, each driver simply files a claim with his or her insurance company and the insurance company pays for the driver’s losses up to the policy’s limits.

The main benefit of PIP systems is that they usually result in far less litigation clogging up the court systems; instead of fighting over who was at fault in an accident, the insurance companies just pay each of their policyholders for their losses, which makes sorting out exactly what happened in the accident much easier. In states that have replaced their liability systems with PIP systems, the most commonly cited reasons for doing so are that they reduce auto insurance rates, increase the fairness of reimbursement, and reduce the burden on the courts. States with no-fault insurance systems at the time of publication of this article include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

Insurance in Florida

Florida law requires that all drivers in Florida have car insurance. The minimum insurance requirements the state requires are as follows:

  • $10,000 of no-fault PIP insurance
  • $10,000 of property damage liability (PDL) insurance 

PIP insurance covers your part of any medical expenses and income loss that results from a car accident, as well as:

  • Your child and other members of your household
  • Your child when he or she is riding on a school bus
  • You when you are a pedestrian or cyclist involved in a car accident
  • Passengers in your car who do not have their own PIP insurance and who also do not own a car

PDL insurance covers you for the damages you cause to someone else’s property in a car accident, such as cars, homes, or other buildings.

PIP and PDL requirements are just the minimum amount of coverage required by Florida law. most drivers, especially those with newer vehicles, will want to opt for enhanced coverage, which is available in the following forms:

  • Comprehensive: This coverage pays for damages to your car that are not the result of a car accident, such as scratches, dents, and hail damage
  • Collision: This coverage pays for accident-related damages to your car
  • Towing and labor: This coverage pays for any towing and labor costs that are associated with a car accident
  • Uninsured/underinsured motorist: This coverage pays for damages incurred by accidents with drivers who do not have insurance


The Florida Bar publishes a pamphlet to residents of the state of Florida with many recommendations on navigating the sometimes confusing landscape of auto insurance and car accidents. A few of their most important recommendations are below.

-Request a quote from several different insurers to make sure that you’re getting the best coverage for the lowest rate.
Make sure that the information on your application is accurate; false information could cause you insurer to cancel your policy or refuse to cover a claim when you make one.

-Make sure that you understand what your policy covers. Every policy should include a “plain language” description this, including a description of the benefits and coverages and a breakdown in how the premium is applied, a summary of what is and is not covered under specific conditions, a summary of the policy’s renewal and cancellation provisions, and a description of any credits or extra charges.

-Get a binder when you sign the application—this can be used as temporary proof of insurance until your formal policy is issued.

-Keep track of your policy renewal dates—most are for terms of either six or 12 months.

-Be sure to report any changes to your insurance agent, including new drivers, new cars, or changes in the use of your car.

Contact a Clearwater, FL Auto Accident Attorney Today

If you have any questions or concerns about Florida auto insurance or have recently been involved in an auto accident, please contact the attorneys at the Dolman Law Group for a free consultation by calling 727-451-6900.