Reader’s Question:

I’m really confused. Out here in Florida, we have a no-fault car insurance system. How come some people still tell me to get myself an underinsured or uninsured motorist coverage?

Lizzie

Tampa, FL

It took me quite some time to process your question, too. I know it sounds illogical to purchase an underinsured or uninsured motorist coverage when you are in a state that follows the no-fault system. I think this is the rationale behind other people’s suggestions. The coverage that is required by all no-fault states is the Personal Injury Protection or PIP. This type of coverage pays for your medical bills, loss of wage and what-have-you. And it doesn’t matter who is at fault. Remember, it is the no-fault system, and your car insurance policy should cover all these expenses. However, this coverage has its limits, in dollar values and scope.

Like, for instance, it is only pegged at $10,000 per accident. So, let’s say, you and your three passengers are all seriously injured in a collision, there is no way the $10,000 coverage would be enough to cover all your hospital bills and all lost wages. Also, let us not forget the fact that you still have the damages on your car that you have to take care of.

An underinsured or uninsured motorist coverage, on the other hand, though it may cost more, would cover 100% of all your expenses on medical bills, wage loss and other damages. The truth is Florida lands on the top 10 states with the highest premiums. But hey, who says you can get peace of mind cheap?