Protecting yourself and your family with car insurance:
You can purchase car insurance in basically 4 ways. You can buy it over the internet, you can buy it over the phone directly from an insurance company or you can purchase auto insurance from an independent agent or you can purchase insurance from a captive agent like Allstate or State Farm. How do these companies differentiate themselves? Some boast about their superior service when you file a claim. Some brag about how easy it is to buy insurance from them. Often, car insurance companies try to compete solely on price which should be your first signal to be cautious. If a company states that they can save you a certain percentage on your Sarasota Car Insurance that puts an enormous amount of pressure on their sales force to get you those savings by increasing deductibles and lowering important coverage.
How much auto insurance should you purchase?
Most states require you to have Car Insurance, but at minimum limits. In Florida you are required to purchase the following limits:
- Bodily Injury Liability $10,000 per person / $20,000 per accident
- Property Damage Liability $10,000
- Personal Injury Protection $10,000 (Florida’s No Fault Law)
If you buy the minimum coverage required by Florida law, you are leaving your non-exempt assets at considerable risk. Generally speaking the following assets are exempt from lawsuits and are judgment proof except for IRS and Divorce judgments: Cash Value Life Insurance, Annuities, Retirement accounts including pensions and your Primary home. All other assets can be taken from you in a lawsuit and are at risk.
There are seven major coverages in an auto policy:
- Bodily Injury Liability – This pays the medical and other expenses of those people injured or even killed in accidents you cause. This is required by the State of Florida with a minimum coverage of $10,000 per person and $20,000 per accident.
- Property Damage Liability – This covers the damage your car causes to property. Usually, that’s the other car or cars involved in the accident but it also covers damage you do to any object you hit; garages, structures, lampposts, fences, etc. This is also required in Florida with a minimum limit of $10,000.
- Collision – This covers the damage done to your car when it collides with other vehicles or other objects. The damage done under Collision is your fault and you are subject to your Collision deductible.
- Comprehensive – The covers the damage to your car caused by something other than a collision with another vehicle. Examples include damage caused by vandalism, theft, fire, wind and flood and collision with an animal.
- Personal Injury Protection – Florida No Fault Insurance. This covers you regardless of fault up to $10,000 of coverage. Your PIP will also cover your child, members of your household, certain passengers who lack PIP coverage as long as they don’t own a car. People riding in your car who carry PIP coverage will be covered under their own policy. PIP also covers your child if he or she injured while riding a school bus. PIP coverage protects you while riding in someone else’s car, as a pedestrian or bicyclist if you are injured in a crash involving a car.
- Medical Payments – This pays medical and even funeral expenses for you and members of your family and passengers in your car if involved in a collision regardless of who is at fault. It also covers you as a pedestrian if a car hits you. Because of the limitations under PIP coverage, a Medical payments limit of $2,000 or higher is recommended.
- Uninsured/Underinsured Motorist – This pays for injuries to you, your family & passengers when in an accident caused by someone who does not have insurance or has minimal coverage and is underinsured. This important coverage also provides coverage for any injuries you suffer if you are hit while walking or riding a bicycle by a driver with no insurance or inadequate insurance.
There are more coverages available:
There are some additional coverages you can purchase. You can buy towing coverage which will pay the cost if your car needs to be towed up to $50. If you have a motor club of any kind, this coverage is not needed. Many newer cars provide roadside assistance automatically.
You can buy Rental reimbursement coverage which is important. This coverage will pay the cost of your rental car while your car is being repaired due to a covered accident. The coverage is usually for $30 per day for 30 days but higher limits can be purchased.
How much auto insurance do you need?
Bodily Injury Liability:
You can buy the minimum required by Florida law which is $10,000 person and $20,000 each accident or you can buy much higher limits say $500,000 or even $1,000,000. Remember that someone you hit can sue you for everything you have except for the exempt assets Life Insurance, Primary Home, Annuities and Retirement Plans. You want to make sure you have enough to properly protect your assets and your income. Your wages are not protected so always err on the high side when choosing your limits. Remember that driving a car is probably the most dangerous thing will do so make sure you have the proper protection.
Property Damage Liability:
Many years ago, $25,000 was considered the maximum limit most people needed for this coverage. Not anymore. There’s a lot of $50,000, $60,000 even $120,000 cars and sport utility vehicles on the road today. Because of all the high-end cars on the road, we recommend at least $50,000 for this coverage and most of the time $100,000 is a better limit. The price difference between a $50,000 limit and a $100,000 limit is minimal.
Consider how much you can afford to pay to have your car repaired if you have an accident. Auto policies have several deductible options. The deductible is the part you pay before the insurance starts paying. You can buy deductibles of $100, $250, $500 or $1,000. The lower your deductible, the more Collision coverage will cost. Its probably best to have a $500 deductible. The deductible does not apply if someone else hits you and that person’s insurance is used to repair your car.
Like collision coverage, there’s a deductible with Comprehensive although we recommend a lower deductible of $100 or $250. Comprehensive coverage is much cheaper than collision and comprehensive claims don’t count as severely against you because you are typically not at fault. While collision and comprehensive will pay for damage or loss to your car, neither coverage will pay for everything on or in your car. Most policies exclude items like CB Radios, Car Phones, Cds.
If you add special features to pickups, vans or SUVs(like chrome wheels, camper tops, lighting) these items will probably be excluded but can be covered by adding special coverage for these items.
Personal Injury Protection:
This coverage is required by Florida Law so the limit is $10,000. Some companies offer Extended PIP and Additional PIP. Other options are deductibles and coinsurance. It’s a good idea to discuss this coverage in detail before purchasing to be sure the best options are chosen for you and your family.
Some people elect not to purchase this coverage because they think their health insurance provides coverage. Medical payments most often is used to cover the amount not covered by PIP. Because PIP is an 80/20 coverage up to $10,000, Medical payments coverage is needed to cover the $2,000 PIP does not cover. Because it is part of your car insurance policy, no coordination of benefits is necessary and the claim is paid quicker.
For most people, it’s a good idea to have the same limits for UM/UIM as you have for Bodily Injury. Uninsured/Underinsured Motorist coverage is for the bodily injury you and your family sustain while in a car accident. UM/UIM has very few limitation on what is covered so it can be a very valuable coverage when you are really hurt and the at-fault party does not have enough Bodily Injury coverage to take care of your injuries.
Who is covered when you buy auto insurance?
All the coverages in your auto policy apply when you are driving but they also apply when other people are driving your car. The coverage follows the car not the person. If someone is going to be a regular operator of your car, that person needs to be added to the policy as a driver. Your insurance company wants to know who’s going to be using the car. After all, you could be a great driver with no tickets or accidents but your spouse, your teenager or your cousin staying with you may be lousy drivers. If you let people regularly drive your car without telling the insurance company and these people get into accidents, your insurance company will not be happy and in fact may cancel your policy. Some companies are very strict on drivers and will not pay claims unless the driver involved in the accident is listed in the policy as a driver.
Claims that are not covered by your auto policy:
- If you intentionally try to cause damage to your car or another vehicle. This includes liability coverage.
- If you are using the vehicle to transport other people for a fee.(This does not include car pools where expenses are shared)
- If you are using the car for certain business activities. This does not include traveling to see clients or taking a standard business trip.
- Normal wear and tear, freezing, mechanical or electrical breakdown or road damage to tires.
- If your car is damaged because of radioactive contamination, nuclear weapons, war, insurrection, rebellion or revolution.
Discounts, discounts & more discounts…
Car insurance companies offer a wide array of discounts to customers they want to attract with lower rates than the competition. Some of the common discounts to ask about when shopping for Sarasota Car Insurance are:
- Homeownership Discount (owning your own home will save you money on car insurance)
- Multi-car Discount
- Safety Discount for Air Bags and Anti-Lock Brakes
- Safe driver discount for three years or five years if no tickets, accidents or claims
- Good Student Discount if your teenager maintains a “B” average or better
- Prior limits of $100,000/$300,000 or higher will get you a lower rate
- Multi-policy discount(auto and umbrella with the same company)
- Active or passive alarm system in your car
- 5 star crash rating cars will have a lower collision rate than cars with a higher damageability rating.