Over the past 11 years of selling and servicing auto insurance policies I have come to a very simple conclusion: Most consumers don't know much about what they are purchasing when shopping for car insurance.
And that's okay. That's what agents are for!
Every day I am asked all sorts of questions about auto insurance coverages. Is Personal Injury Protection required?, Do I have enough coverage?, What is Uninsured Motorist?, Do I need Bodily Injury? Those are just a sample, and that's why I decided to do this informative series.
In this series, I will explain what each coverage is, what coverage is recommended, and I'll even cover some other questions that I have ran into in the past regarding these specific coverages. Up first...
Personal Injury Protection
Personal Injury Protection, or PIP, as most people call it, is a coverage that reimburses you, the insured, for lost wages and medical costs.
PIP is required in the state of Florida, so you cannot purchase car insurance in Florida without PIP coverage. PIP covers you, relatives who live in your home, certain passengers who do not own a vehicle, and others who drive your car with your permission. PIP can also provide coverage for acts of violence against the policyholder while driving, including injuries sustained as a result of road rage or a carjacking.
PIP coverage is always a $10,000 maximum limit per person in the vehicle. You may choose to have a deductible on your PIP depending on what you prefer. Usually the deductibles can be $0, $250, $500, or $1,000. The deductible is the amount that you pay out of pocket before the coverage kicks in.
Also, you have two types of deductibles: NI, Named Insured, and NIRR, Named Insured Resident Relatives. Named Insured means the deductible that you select applies only to you. Named Insured Resident Relatives will apply the deductible to you, the named insured, and any residents in your house that are relatives. So if you have a $1,000 NI deductible and suffer a covered $10,000 PIP loss, the company will only pay a maximum of $9,000. If you and your non-resident-relative passenger were to both suffer a covered $10,000 loss each, and you have a $1,000 NIRR deductible, your policy should pay $9,000 in damages to you and $10,000 to your passenger. If we use the same example, but your passenger were a relative who is a resident in your home, then the damages paid would change to $9,000 for you and your passenger.
It is also important to note that your PIP coverage follows you. If you are injured as a pedestrian, your PIP will pay up to $10,000 for your damages. If you are a passenger in someone else's car, YOUR PIP will cover your damages first as well, up to the limits on your PIP coverage.
Something else that is covered under your PIP coverage is Work Loss. If you are injured in an accident, your PIP can help cover your lost wages due to your injury. The coverage is still only $10,000, though – it will never exceed that amount. If you are retired or do not work, you can exclude the Work Loss coverage. I very rarely recommend excluding the Work Loss coverage. If you are considering excluding it, talk to your agent (or even me!) first.
Personal Injury Protection can be very important to you and your passengers if you are ever injured in an accident. Fortunately, the state requires it, so everyone that has car insurance in Florida will have PIP. The only decision you will have to make regarding PIP is what deductible to select and whether to exclude Work Loss or not. If you need help deciding what PIP deductibles you should select, just email me or message me on Facebook or Twitter. I am sure I can help you decide.
Read part two (Bodily Injury Liability) here.
Read part three (Uninsured Motorist Coverage) here.
Read part four (Property Damage) here.
Read part five (Other Coverages) here.