By Julie A. Martin
Dear Gentle Readers,
The mere mention of insurance is liable to put red spots in your cheeks and in your eyes, but have no fear, I am about to share some insider secrets on what you can do to your policies that make them more cost effective for you.
Are you ready?
Property Damage Liability in auto insurance is typically chosen with bodily injury liability in split limit increments such as 10/20//10 with the second 10K being the property damage liability limit. Most carriers offer other choices, such as 20K, 25K, or even 50K property damage liability with the 10/20 split limits. With 25/50 BI you may have options of 25K, 50K or even 100K liability.
The price difference between limits in Property Damage Liability can be less than a case of soda, on a six month or annual basis. It is generally best to opt for the highest property damage limit you can get with your chosen liability limits, as it creates an extra buffer for you, and it is only slightly more expensive than you would have paid for your insurance anyway.
Comprehensive coverage is another area where you may opt to save yourself some money in case of a flood, hurricane, fire, vandalism or other event where your car might be damaged by an incident not involving collision. Most folks have $500 deductibles on Comprehensive and Collision coverage, and that is what many would consider standard. But, I will share a secret with you.
Most of the time, you can decrease your Comprehensive deductible from $500 to $250, that’s right, cut it right in half, for less than a double-blended Venti Frappuccino at Starbucks with extra drizzle.
Insurance is for you, so that you can be made whole again in the event something happens. To make it easier for you to be indemnified, making small adjustments to your existing coverage will help you feel better about the coverage you have.
Now let’s talk about Uninsured Motorist Coverage. First, let me say that we do not have a requirement to carry Bodily Injury Liability in the State of Florida. The minimum required coverage in order to be “street legal” for most people, is 10K Property Damage Liability and 10K Personal Injury Protection.
Now, you’re going to ask me, what if they hit someone?
THAT’S why we have uninsured motorist coverage, in case you get hurt in an accident that is not your fault.
Here’s how this works in Florida. First, you go through your 10K in Personal Injury Protection (PIP), which pays 80/20 medical expenses minus your deductible—say you have a $500 deductible on PIP.
10K in medical expenses minus $500 deductible (80/20) would equal $7,500 in medical expenses.
What if you have $30,000 in medical bills?
You have several choices when it comes to Uninsured Motorist (UM) coverage. Stacked and Unstacked equal to your current Bodily Injury Liability, or Stacked or Unstacked lower than your Bodily Injury Coverage.
Stacked UM means that you multiply the number of vehicles on the policy by the limits. Stacked 100/300 X three vehicles would be 300K per person/900K per accident.
So, in the accident shown above, your Personal Injury Protection goes first, and then if you have medical payments coverage, that comes next, and then the at fault party’s Bodily Injury Liability, and only then would it go to your Uninsured Motorist coverage, which is excess over all these other coverages.
If you do not have UM on your auto policy now, you might want to have your friendly licensed insurance agent offer a quote to find out how much it would cost to add to your policy.
It’s important to know the different ways to make your insurance work for you, and help you gain peace of mind knowing you have the right coverage in the event something happens.
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