While Florida state law requires all drivers to carry a minimum amount of car insurance, there are still many benefits to selecting a more solid coverage plan.
Having a strong car insurance policy can protect you from mounting financial trouble and harrowing lawsuits if your vehicle sustains damage, if you’re injured, if you injure someone else, or if you destroy their vehicle — whether or not you’re at-fault.
While we previously explained the basics of car insurance, we’d like to go a step further and explain the difference between comprehensive and collision insurance. Though Floridians aren’t required by law to carry either plan, each has specific benefits. Far too many drivers don’t understand the difference between plans, which can lead to major problems down the road (pun intended).
It is important to note that liability will cover the cost of another driver’s vehicle and belongings if you are found at fault in a crash, but liability insurance will pay nothing toward the damage to your own car, truck, or SUV. You will need a collision policy if you hope to have those expenses covered.
Before you back out of your driveway, consider what car insurance you carry and what it does to keep you protected.
Collision insurance is a type of coverage that helps cover repairs, or even replace your vehicle, in the event of damage in a crash. Because collision insurance defends against any damage done to your vehicle, should you be involved in an accident with another vehicle or any stationary object, we highly recommend carrying it with your plan, along with UM (Underinsured Motorist) and BI (Bodily Injury) coverage.
Whether you hit a telephone pole across the street, backed into a neighbor’s mailbox, or hit a tree after swerving to miss an obstacle in the road, you can rely on your collision insurance plan for coverage, in most cases.
While it’s important to note that if you are found at fault in a car crash, liability will cover the cost of another driver’s vehicle and belongings, but not yours. You will need a collision policy if you hope to have the cost of damages to your own car, truck, or SUV covered.
One important aspect of collision coverage insurance that many Florida drivers overlook is that it applies regardless of fault. Whether you caused the accident or another driver did, your collision coverage insurance kicks in to cover the damage to your own vehicle. This is especially valuable in situations where the at-fault driver is uninsured or underinsured. This is a common problem in Florida, which consistently ranks among the states with the highest uninsured motorist rates.
When you file a claim under your collision coverage insurance, you are responsible for paying a predetermined deductible before your insurer covers the remaining repair costs. Common deductible amounts range from $500 to $1,000, though you can choose a higher or lower amount when setting up your policy.
Here’s a straightforward example of how it works: If your car sustains $3,000 in collision damage and you have a $1,000 deductible, your insurance company will pay the remaining $2,000. Your deductible amount directly affects your monthly premium; a higher deductible generally means a lower monthly premium, while a lower deductible means you’ll pay more each month but less out-of-pocket at the time of a claim.
When selecting your deductible, consider your financial cushion. If an unexpected $1,000 expense would cause serious strain, it may be worth paying a slightly higher monthly premium to keep your deductible low. On the other hand, if you’re a cautious driver with a clean record, a higher deductible can be a reasonable way to keep insurance costs manageable.
The answer to this question depends on how old your car is, how long you’ve had it, if you’re still making payments on it, and whether or not you can afford to buy a new car if it’s damaged or totaled.
If you couldn’t afford to buy a new car if it were damaged in an accident, the extra few hundred dollars you’d spend on collision insurance would likely be worth it in the long run.
While we are not able to find any states that currently require collision coverage, most car dealers will require you to purchase some variation of this plan if you are financing or leasing your car.
Keep in mind that if the car dealer requires collision insurance and you neglect to purchase it, they will tack it onto your monthly payment plan. Otherwise known as “force-placed” insurance, where you could pay up to five times more on this premium, so we recommend purchasing this coverage through an insurer of your choice.
As a general guideline, financial experts often suggest reconsidering collision coverage insurance when your vehicle is more than 10 years old or worth less than $5,000. At that point, you may find that the annual cost of the premium exceeds 10 percent of the car’s total value, meaning the math may no longer work in your favor. That said, every driver’s situation is different, and it’s worth doing the calculation for your specific vehicle before making a decision.
In Fireman’s Fund Insurance Company v. Cramer, the difference between collision and comprehensive insurance were clearly distinguished. Whereas collision coverage included most situations where a car collides with the driver’s property or someone else’s, comprehensive coverage has little to do with car accidents.
Comprehensive insurance is a type of coverage that helps cover repairs, or even replace your vehicle if it is stolen or damaged in an incident that’s not a collision with another vehicle. This is the policy written to handle the many types of damage that can be done, which do not fall under the “collision” category.
In a nutshell, comprehensive insurance covers any damage from fire, vandalism, fallen objects, or damage from hitting animals that run into the road. Because it covers an entire realm of possibility not touched on by collision insurance, we highly recommend carrying a comprehensive insurance policy as well.
It’s worth noting that collision coverage insurance and comprehensive insurance are frequently bundled together and referred to as “full coverage.” While “full coverage” isn’t a specific policy type defined by Florida law, it’s a term commonly used by lenders and dealers to describe a vehicle that is protected against both accident-related and non-accident-related damage. If you’re financing or leasing your car, your lender will almost certainly require both. Do not assume just because someone uses a term of art like “full coverage” that you also have proper injury or underinsured motorist coverage.
The key distinction to keep in mind: if it involves your car making contact with something (another vehicle, a guardrail, a tree) that’s a collision claim. If the damage comes from the environment, criminal activity, or an animal, that falls under comprehensive coverage. Understanding this difference helps you file the right claim quickly and avoid unnecessary delays in getting your vehicle repaired.
Much like collision insurance, you can opt to drop your comprehensive insurance plan, but be warned: dropping this plan means you will not be covered in the event your car sustains “act of god” damage.
Comprehensive coverage is also not required to own a vehicle, but you should consider keeping it, especially as anything could happen. If you’re no longer making payments on your car, have the means to pay out of pocket for any damage, or can even purchase a new car, you can insure your vehicle as you please.
However, much like collision insurance, auto dealers will require you to purchase a comprehensive insurance plan, and will also force-place a plan onto your monthly car payment if you fail to secure a plan by a deadline.
Florida’s climate makes comprehensive coverage particularly relevant. The state’s hurricane season, frequent severe thunderstorms, and flooding risk mean that non-collision vehicle damage is a real and regular concern for Florida drivers, and not just a remote possibility. For drivers in coastal areas or regions prone to flooding, carrying comprehensive coverage is a wise investment regardless of a vehicle’s age or value.
When assessing the value of a car accident claim, it is also essential for attorneys to review the insurance coverage and policy limits of all parties involved. This information is used to determine how much compensation may be recovered from an insurance company or party liable for causing the crash.
In addition to reviewing the at-fault driver’s bodily injury liability limits, attorneys will also examine whether the injured party carries collision coverage insurance, as this can become a critical source of compensation when the liable driver’s coverage is insufficient. Florida’s no-fault insurance framework adds another layer of complexity, making it all the more important to have a thorough understanding of every applicable policy before pursuing a claim.
Deciding to drop your collision and comprehensive plans depends solely on your financial situation, your vehicle’s age, whether you recently purchased it, are no longer making payments, or simply have the means to pay more, should something happen.
According to Florida Statutes, there are many reasons someone might decide to drop their collision and comprehensive insurance plans. The first is simple: affordability. Car insurance, as it is, can get fairly expensive, and tacking on two additional coverage options can put a dent in your pocket.
The second reason someone could opt to drop their collision and comprehensive coverage is? Value. If you’re paying too much for insurance — say, more than the value of your car — it is safe to drop your plan. However, if you don’t plan on buying a new car or if you don’t want to pay the out-of-pocket cost for damages, we suggest holding these premiums tight.
All in all, consider your driving habits, your record, the safety features included in your car, and how often you drive. This is not to say, however, that your car won’t get damaged sitting idly in your driveway.
If you’re like most Americans, you don’t have a plethora of savings dedicated to car replacements. Downgrading to regular insurance is always an option, but there are many car insurance claims issues that could arise. That’s what we’re here for.
Whether your claim was denied, underpaid, or if you experienced personal injury at the hands of a negligent or uninsured driver, you don’t need to dispute your insurance company alone.
Our expert legal team at Herman & Wells is well-versed in tackling the many nuances of insurance companies, and we’re here to fight for you, from a free evaluation to the courtroom. Better yet, we won’t accept payment unless we win you a settlement.
Call (727) 821-3195 today for a free evaluation today!