We see these all the time coming into our agency; someone telling us all they are interested in are the State Minimum requirements for an Auto Insurance Quote. In many cases, they are requesting this simply because of price. It will give them the smallest monthly payments available so they can stay within state compliance to drive on a Florida highway.
The challenge with this request is, quite simply, you get what you pay for. Yes you will have low monthly payments and in some cases, you could see monthly payments as low as $60 – $70 a month and even lower in some cases. The crux of the matter is what happens when you get into an accident. So let me breakdown what coverage you get with State Minimums in the event of an accident:
So for Florida law requirements, a vehicle owner must carry PIP coverage and Property Damage coverage. So let’s define what these two coverages are:
- PIP Coverage: Also known as Personal Injury Protection, PIP coverage helps cover expenses incurred due to an accident for insureds covered on the policy. This includes medical, funeral, and essential service expenses as well as loss of income. On a Florida policy by default, you get a maximum of $10,000 in PIP coverage.
- Property Damage: Property Damage is defined as liability coverage that will pay for accidental property damage caused by an insured driver to someone else’s property when the insured is legally responsible; this includes repair or replacement of the other party’s vehicle, as well as repair to other property damaged in the incident such as a garage or a mailbox. For state minimum requirements, you must carry at least $10,000 in property damage coverage on your policy
So these are the 2 coverages you have to have, bare minimum, on a policy in Florida. So let’s look at what this gives in the event of an accident.
Let’s say you are driving down the interstate in the morning, heading east and the sun in blazing right in front of you, making it hard to see. What you didn’t notice was the cars that suddenly stopped in front of you and you ram into someone. Maybe you had time to apply the breaks so you only hit them going about 30 miles an hour. Unfortunately the vehicle you just crashed into also happened to be a 2022 BMW – OUCH!
So here’s where you stand, there were 3 people in the BMW; 2 in the front seats and 1 in the back seat. You hit the vehicle hard enough the air bags deployed. Both front passengers seem to be okay but one is complaining of a shoulder injury and the other has neck pain. The person in the back seat wasn’t as lucky, they hit the seat in front of them hard and has a significant bruise and a potential concussion.
After all is said and done there was $20,000 worth of damage to the BMW, $15,000 in damage to your vehicle, the 2 front passengers in the BMW sustained soft tissue injuries and the person in the back was taken to the hospital. Now looking at the Property Damage coverage which only includes damage to the BMW, you maxed out the limit at $10,000 and you still owe $20,000 in damages to their vehicle. Your vehicle has no collision coverage so the entire $15,000 is out of your pocket for repairs. Because you don’t have any Bodily Injury coverage on the policy, the insurance company won’t pay the medical expenses the occupants of the BMW sustained.
So while you are paying less than $100 a month for your State Minimum car insurance, at the end of an accident like this, you are on the hook for at least $25,000 in property damage and because you had no bodily injury coverage, the people you hit have hired an attorney and are suing you for the medical expenses they incurred. This could lead to hundreds of thousands of dollars in payments, garnished wages, assets seized as the court see fit.
So when you are looking at your auto coverage, keep this kind of very real scenario in mind. No one ever believes they will be in an accident until they end up in one and at that point, it’s too late to think about updating your coverage.
If you have questions about your current coverage and aren’t sure if you have the right amount. Be sure to reach out to your agent or give our office a call and we will be happy to discuss your current coverage and review the options with you. Remember what you pay now is so much easier than the cost you will incur when you go with the State Minimum coverage.