We’ve all heard the little green lizard and the lady with the apron talk about how you could save “hundreds” of dollars on car insurance in just a few minutes. Unfortunately, the true cost of cheap car insurance could be thousands of dollars after an accident and even cost you your car.
The so-called “savings” these insurance providers offer is almost always created by stripping away very important insurance coverage. Fast talking agents and online savings tools often strip away valuable coverage from a policy in order to create the lowest possible premium and monthly payment. “Cheap” car insurance policies often provide little to no protection from underinsured or uninsured drivers. State required minimums that entice drivers with low premiums can leave you with unpaid medical bills or facing a lawsuit due to lack of bodily injury coverage.
A quick examination of a policy’s declarations page will let you know how well you are protected. Does the Personal Injury Protection, (PIP) benefit have a large deductible? Are lost wages included? Will the amount of property damage and bodily injury coverage protect you from a huge claim if you are at fault? Does the policy include sufficient Uninsured Motorist coverage to protect your car if a negligent driver severely injures you or severely damages or totals your car?
To examine proper coverage more closely and the true cost of cheap car insurance, consider this. Florida is a no-fault state. What this means is that in an accident, each driver’s personal injury protection insurance, (PIP) is immediately available to cover 80% of medical expenses and 60% of lost wages up to the policy’s limits. Florida requires drivers to carry at least $10,000 of PIP coverage. Florida also requires drivers to carry at least $10,000 in property damage “liability” coverage, (PDL). This coverage pays for damage caused to another person’s property. This coverage does not pay for damages to your own vehicle or property.
Now, let’s look at the true cost of cheap car insurance. Let’s say that you were the victim of a careless driver and you were involved in an accident that was not your fault. Let’s also say that your medical expenses as a result of the accident were $50,000. And your financed vehicle, that you still owed $30,000 on was totaled.
The first thing that will happen is that your own PIP insurance will pay up to 80% of your medical expenses. If you only have the state required minimum of $10,000, you will only receive $8,000 in compensation. This leaves $42,000. If the driver that caused the accident and your injuries does not have bodily injury insurance, (BI) that covers medical expenses they caused, your only remaining option is to file a lawsuit against the driver that caused he accident. This action is rarely fruitful.
The other aspect in this example is your totaled vehicle. Again, if the driver that caused the accident is only carrying the state required minimum property damage liability coverage of $10,000, not enough to cover $30,000 you owe on your vehicle loan. If you do not have your own coverage for this scenario, your only recourse again is to file a lawsuit against the driver that caused he accident.
The only way to protect yourself from the true cost of cheap insurance is ensure that you are carrying enough PIP insurance to pay your own medical expenses and cover the value or amount you owe on your own vehicle with uninsured motorist or underinsured motorist coverage.
Be wary of discount insurance companies that create low rates by removing categories of coverage or by providing quotes with insufficient coverage amounts to protect you and your family. Our car accident lawyers are always available to help you understand your car insurance coverage and how much protection it can provide. The learn more about the true cost of cheap car insurance and for a free evaluation of your auto insurance policy, call or text us at (904) 358-3300 or use the form below and we’ll get back to you as soon as possible.
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