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The “Full Coverage” Fallacy

Hi, thanks for joining me here on my maiden voyage onto the Florida Insurance Law Blog. For my first entry, I’d like to address a common misconception regarding auto insurance that I’ve repeatedly encountered during my short, yet-oh-so-illustrious, legal career: The “Full Coverage” Fallacy. “Full Coverage” is almost always the response I get when asking friends, family, or potential clients about their auto insurance coverage. “Full Coverage” is the predictable and common response across all socio-economic and educational backgrounds, gender and races. The problem with the “Full Coverage” answer is that it doesn’t make any sense…from a legal standpoint anyway.

There is no such thing “Full Coverage” in Florida.

To the contrary, Florida law only provides that drivers carry a “minimum” level of coverage – $10,000 in Personal Injury Protection (PIP), which covers your own medical expenses incurred as a result of an auto crash, and $10,000 in property damage coverage (for more info on Florida’s insurance requirements see http://www.flhsmv.gov/ddl/frfaqgen.html). Note that Florida law doesn’t even require you to purchase Bodily Injury (BI) coverage, which serves as a financial safeguard in the event that you are sued for causing an accident. By way of an oversimplified example, let’s assume you have $100,000 in BI coverage; you cause an accident and get sued. In that case, your BI coverage would cover you for any amount up to, and including, $100,000 in damages that the other driver might win against you. But wait, here’s where it gets interesting….

Let’s keep running with that same example: Let’s also assume that you earn $750,000 a year (I know, I wish too), and that you have hundreds of thousands of dollars in non-homesteaded property and assets. Let’s also assume that the person suing you was seriously injured and underwent surgery as a result of the accident you caused. Now, with those facts, that $100,000 in BI coverage doesn’t sound so comforting with all of those assets on the line. With the additional facts of this example, you could now find yourself in a position where you could/would be held personally responsible to pay for the injured person’s damages which exceed your BI policy limits. In other words, if the other driver were to win, for example, a $250,000 judgment against you, you could be on the hook for the other $150,000 in excess of your policy limits. This is an example as to why THERE IS NO SUCH THING AS “FULL COVERAGE” – too much insurance for one could mean, and often does mean, dangerously inadequate insurance for another. There is no “full coverage” standard. Sufficient coverage is solely dependent on your own personal circumstances, including your current and anticipated financial circumstances. I’ve known far too many young CPA’s, lawyers and doctors, who carry far too little insurance coverage just because they want to save a buck on the premiums. Trust me, I don’t enjoy handing over money to those corporate conglomerate insurers, but it makes it easier to swallow when you think about what is at stake should you purchase too little coverage. It is also important to remember that there are legal remedies available to an insured if their insurer fails to live up to its end of the bargain.

Remember, although the law does require you to purchase minimum levels of insurance, you should purchase enough insurance to fully protect your assets. In theory, if you’re truly seeking “full coverage,” then you must examine your own personal financial circumstances and obtain sufficient coverage that will protect your assets should you ever find yourself facing a lawsuit. If necessary, meet with a licensed and qualified financial and/or insurance professional to find out how much coverage is right for you.

Now, please note these examples only address the “Full Coverage” fallacy from the BI standpoint, which examines situations where you might find yourself being sued for causing bodily injury. In my next installment we’ll chat about what is known as underinsured/uninsured motorist coverage (commonly known as UM coverage), which is insurance that will protect YOU if you’re injured at the hands of an uninsured/underinsured driver.

Until then..

Have fun. Be good. Be safe. Be educated.

Mike Santana


There is no such thing “Full Coverage” in Florida.

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