By John Foote

      Very few people ever read their insurance policy in detail. Most never will. It is the unfortunate victims, or people who make a mistake and cause an accident, who will find out the hard way what is covered and what is not.

     Below are five important areas of an automobile insurance policy which people should be familiar with regarding their coverage. Of course, these are not the only important areas of an automobile insurance policy and we do not mean to convey specific advice for a specific situation. Insurance policies can be difficult to understand, so if you have any doubt about yours, sit down with your agent and get all of the information. If your agent won't help you understand your policy, consider a new agent and/or company.

     1. Uninsured/ Underinsured Motorist Coverage (UM): This coverage protects you if a driver with inadequate or no auto insurance injures you. This would also include the "phantom vehicle" which caused the accident but could not be identified. Your company would "step into the shoes" of the uninsured or underinsured driver who caused your accident.

      You might have been told that if you carry health insurance you don't need UM coverage. That is wrong. Health insurance doesn't pay your lost wages or pain and suffering. Many health insurance policies also contain a right to be paid back if you ever do collect from the person who caused the accident.

      We highly recommend that you carry as much UM coverage as possible. You are protecting yourself against the other driver that causes your injury, and you want your insurance carrier (in the place of that driver) to be able to cover as much of your damages as possible. Also, ask your agent about "stacking" the UM coverage. For instance, when you own two cars you may double your UM coverage by stacking one UM policy on top of the other. Although you may pay a slightly higher premium to do this, the added protection is worth it.

     2. Bodily Injury Liability Coverage (BI): BI provides compensation for any person who may be injured through your negligence or the negligence of someone else while driving your car. It is important to carry enough BI to protect you from having to pay out of your own pocket if you make a mistake and injure someone. Besides being morally responsible, it is economically necessary for you to protect your assets.

     You are required to purchase BI coverage with at least the same policy limits as your UM coverage. Similarly, we recommend that you buy as much BI insurance as you can.

     3. Who is covered by your policy? Take time to figure out who is, and is not, covered by your policy. That nephew staying with you and driving your car may not be covered, even though he would have been covered when he didn't live with you and borrowed your car. Are you covered when you are driving your car for work? These are excellent questions, and you should know the answers.

     You should also keep your insurance company aware of who lives in your household and who drives your vehicles. Keeping the information from them may make it cheaper in the short run, but could cost you a bundle in the long run if the company denies coverage for an accident or cancels you for failure to disclose information.

     4. Personal Injury Protection (PIP) and Med-Pay Coverage: PIP ("no-fault") insurance is mandatory in the State of Florida. As your primary insurance coverage, PIP pays 80% of your medical bills and 60% of your lost wages suffered as a result of an accident. The maximum benefit is $10,000. However, beware that PIP policies with a deductible may place a heavy financial burden on you in the event of an accident. Some companies in the insurance industry sell policies with deductibles because it lessens the chances that they will ever have to pay PIP benefits after an accident. For example, if you carry a $2,000 deductible, you must incur $2,500 ($2,500 x 80%) in medical bills before your company will start paying. Typically, PIP deductibles save you very little on your premium and can cost you a lot > after an accident, regardless of who was at fault for the accident. Do not buy coverage with a PIP deductible.

     In addition to PIP coverage, we recommend that you also purchase Medical Payments Coverage to "fill in" the 20% gap in medical bills paid by PIP. This would allow you to apply more money (from your PIP coverage) toward lost wages in the event your injuries keep you out of work for an extended time.

     5. Rental Car Coverage: Most policies do not cover the cost of renting a car while your car is being repaired after an accident. If you happen to be at fault in the accident, and you haven't specifically purchased rental coverage, you are out of luck. Even if you weren't at fault, you must rely on the other person to have insurance, and rely on their company to cooperate and provide you a rental car (which often takes weeks). If you can't get by without a vehicle, you should purchase rental car coverage.

    If you purchase rental coverage on your own policy, you can deal directly with your company to obtain a rental car following an accident, regardless of who was at fault. Make sure your rental coverage is adequate enough to allow you to rent a car you will be comfortable driving. Many policies provide very small daily amounts that would require you to pay the difference for a bigger or nicer car than the "economy compact" that the insurance would cover.

     As mentioned above, there are many important parts of an automobile insurance policy. The five areas discussed affect our clients on a regular basis. Please take a few minutes to review your insurance documents and talk to your agent about your particular coverage and needs. It may save you money and much distress in case of an accident.