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RD- an actual child support client
"My case was handled quickly and with ease."
01/10/2014
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The Benefits of Uninsured and Underinsured Motorist Coverage

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Personal Injury

Determining appropriate coverage amounts, while considering competing policy offerings in a market flooded with an overabundance of insurance providers, can be burdensome process. Many of us simply purchase a policy, based solely on premium amount and/or Florida’s state minimum requirements, without fully understanding the effect this may have on both liability and compensation in the event an accident occurs.

Often time, the choice to exclude additional coverage within an auto policy is done so because the insured does not fully understand the advantages that uninsured and underinsured motorist coverage (UIM) has to offer. While auto insurance policies issued in Florida are not required to have UIM coverage, including such coverage can be highly beneficial, and for several reasons. Perhaps the most significant consideration is that many Florida drivers unlawfully operate their vehicles with no insurance coverage whatsoever.

In addition, Florida does not require motorists to carry Bodily Injury (BI) coverage, and as such many drivers are insured by a policy meeting only minimum coverage requirements, which in Florida is $10,000 in Personal Injury Protection (PIP) and $10,000 for Property Damage (PD). However, minimum coverage is rarely sufficient enough to cover an individual for their losses in the event of serious injury.

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The benefits of having UIM, and the consequences of failing include such coverage is discussed below, using a comparison between car accidents involving uninsured motorists, and those involving underinsured motorists.

Scenario #1a: The Uninsured Motorist-No Insurance Coverage. Following an accident, in which the victim has sustained serious bodily injury as a result of a negligent driver, the victim subsequently discovers that the at-fault party was not insured under an auto policy at the time the accident occurred. While the victim could seek compensation in a personal action against the negligent motorist, the failure to carry auto insurance is sometimes implicative of the inability of the motorist to pay any judgment that may be awarded to the victim. If the victim’s auto policy does not include UIM, there may be no source from which to seek compensation for injuries beyond what is covered under PIP. However, if the victim has elected to include UIM coverage in their policy, this coverage provides a source of compensation for the victim.

Scenario # 1b: The Uninsured Motorist-Only Minimum Coverage. An accident occurs causing serious injury to another motorist, and the at-fault party has only the minimum coverage required in Florida, meaning such policy has no additional coverage for BI. Although the negligent party is insured to the extent required by Florida law, this motorist, from a legal perspective, is considered to be uninsured, due to their decision to exclude BI coverage in the policy. This distinction is unnecessary, though, because policies issued in Florida include uninsured and underinsured in the same policy provision. While, a victim to an accident in this scenario certainly has the option of seeking compensation in a personal action against the motorist, recovery of any judgment that may be awarded cannot be guaranteed. However, if the victim has elected to include UIM within their own policy, such coverage provides a means of compensation for damages.

Scenario # 2: The Underinsured Motorist-Insufficient BI coverage. A negligent driver collides with another motorist, and as a result the non-negligent motorist sustains serious injury. The at-fault party presents their insurance to the victim, which is a policy providing coverage meeting the state minimum requires of $10,000 PIP and $10,000 in PD, with additional coverage for BI in the amount of $10,000 per person and $20,000 per accident. While $10,000 in your own PIP coverage and $10,000 in the at-fault party’s BI coverage may seem like a sufficient amount to compensate for damages, this assumption is a common misconception. Often, the victim does not immediately know the extent of injuries, need for future treatment, or is simply unaware of the costs and expenses associated with medical treatment. If the victim has included the optional coverage of UIM in their auto policy, however, such coverage offers a recovery source in the event other coverage is insufficient to compensate the victim.

In Florida, UIM coverage is generally included within a single policy provision, meaning that if you select uninsured motorist coverage, you also will receive underinsured motorist coverage, and vice versa. UIM coverage can also be stacked, or unstacked. In addition, Florida requires that the policy limits selected by the insured for UIM be equivalent to the coverage amounts selected for Bodily Injury.