All About Uninsured Motorists Coverage

In Florida the only insurance that is mandatory is PIP (Personal Injury Protection which covers 80% of your medical bills and 60% of your lost wages after an accident regardless of fault up to $10,000.00 – generally – there are bells and whistles that you can get or not get with PIP but thats the basic deal) and property damage coverage.  The kicker is that BI (Bodily Injury) Coverage IS NOT MANDATORY in Florida !!!!! So someone can have “full coverage” and hit you and if they don’t have BI coverage – chances are that they don’t have a lot of assets personally – so you’re left with trying to go after them personally for your damages – in that case – Good Luck trying to find and attorney who’ll help you do that.  UNLESS!!! You’ve got UM Coverage.  UM (Uninsured / Underinsured Motorist) Coverage is that magical coverage that saves you when you are hit by an uninsured driver, a driver who doesn’t have BI coverage (which is A-OK with Florida by the way),or a driver who does have BI coverage but it isnt’ enough to cover your injuries (think your injuries require youu to be hospitalized or have surgeryand the other guy just has $10,000.00 in BI coverage — chances are that’s not even going to cover a few hours in the hospital!)

But I’ve got health insurance, you say, so why do I need UM coverage?

Because – going back to the example of you’ve got injuries that require surgery or hospitalization – your PIP will pay $10,000.00 probably to the hospital and that’s probably going to be gone in a flash, you can request that they reserve it for your lost wages but the hospital is going to be quick and aggressive about getting that money before you do;  if you then have surgery or hopsitalization the $10,000.00 that you would have gotten from the other guy is going to be totally eaten up with the bills too; then say, maybe your health insurance picks up the rest of the bills (and I’m not getting into the complicated subrogation issues that you and/or you lawyer will need to address… I’ll save that for another day – but to be quick about it, the health insurance company is going to want their money back because you recovered from the tortfeasor (the bad guy who hit you); suffice it to say that health insurance isn’t going to help you with your lost wages, pain and suffering – and I know this term is kind of ambiguous – but it means that if you’ve had surgery and can’t then clean your house, pick up your small children, perform normal marital duties – and not just THAT – but that you are probably not as pleasant as you used to be because now you are in pain, and you can’t excercise so you’ll probably put on a few pounds…. health insurance doesn’t help you with all of those losses that result from an auto accident, but UM (Uninsured / Underinsured Motorist) Coverage can not only help with the actual bills but with the nonconomic damages like pain and sufferingand mental anguish and loss of consortium, as well as with your future lost wages and future medical expenses.  Make sense?   Now does it seem pretty important to have UM Coverage?  If it doesn’t yet, please let me know, because I know this is confusing and it seems like – especially in this economy – it would be nice to save some money on car insurance if you possibly could right?  But please don’t save money by skipping UM coverage.

Sidenote THE UM REJECTION FORM:  Casestudy:  I’m working on a case today that involves a client who was hit by a driver who did not have any insurance.  When we got the Dec Sheet (Dec Sheet = Declaration of Insurance — it tells what kind of coverage a person has) back on my client, it said No UM Coverage.  But on closer inspection – I found some! She never signed the UM Rejection Form, and because she didn’t sign it then she automatically gets UM coverage in the amount equal to her BI coverage – and yes she did have it. Oh Happy Day!  Now my client has a form of recovery for her injuries.

Want to know more about how that UM Rejection Form – and the failure to sign it resulting in coverage – works? Here is Florida’s UM Statute – and if you are like me and get a kick out of reading insurance policies and statutes and caselaw – read it – actually read it a few times   (read, rinse, repeat):
627.727  Motor vehicle insurance; uninsured and underinsured vehicle coverage; insolvent insurer protection.

(1)  No motor vehicle liability insurance policy which provides bodily injury liability coverage shall be delivered or issued for delivery in this state with respect to any specifically insured or identified motor vehicle registered or principally garaged in this state unless uninsured motor vehicle coverage is provided therein or supplemental thereto for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. However, the coverage required under this section is not applicable when, or to the extent that, an insured named in the policy makes a written rejection of the coverage on behalf of all insureds under the policy. When a motor vehicle is leased for a period of 1 year or longer and the lessor of such vehicle, by the terms of the lease contract, provides liability coverage on the leased vehicle, the lessee of such vehicle shall have the sole privilege to reject uninsured motorist coverage or to select lower limits than the bodily injury liability limits, regardless of whether the lessor is qualified as a self-insurer pursuant to s. 324.171. Unless an insured, or lessee having the privilege of rejecting uninsured motorist coverage, requests such coverage or requests higher uninsured motorist limits in writing, the coverage or such higher uninsured motorist limits need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits when an insured or lessee had rejected the coverage. When an insured or lessee has initially selected limits of uninsured motorist coverage lower than her or his bodily injury liability limits, higher limits of uninsured motorist coverage need not be provided in or supplemental to any other policy which renews, extends, changes, supersedes, or replaces an existing policy with the same bodily injury liability limits unless an insured requests higher uninsured motorist coverage in writing. The rejection or selection of lower limits shall be made on a form approved by the office. The form shall fully advise the applicant of the nature of the coverage and shall state that the coverage is equal to bodily injury liability limits unless lower limits are requested or the coverage is rejected. The heading of the form shall be in 12-point bold type and shall state: “You are electing not to purchase certain valuable coverage which protects you and your family or you are purchasing uninsured motorist limits less than your bodily injury liability limits when you sign this form. Please read carefully.” If this form is signed by a named insured, it will be conclusively presumed that there was an informed, knowing rejection of coverage or election of lower limits on behalf of all insureds. The insurer shall notify the named insured at least annually of her or his options as to the coverage required by this section. Such notice shall be part of, and attached to, the notice of premium, shall provide for a means to allow the insured to request such coverage, and shall be given in a manner approved by the office. Receipt of this notice does not constitute an affirmative waiver of the insured’s right to uninsured motorist coverage where the insured has not signed a selection or rejection form. The coverage described under this section shall be over and above, but shall not duplicate, the benefits available to an insured under any workers’ compensation law, personal injury protection benefits, disability benefits law, or similar law; under any automobile medical expense coverage; under any motor vehicle liability insurance coverage; or from the owner or operator of the uninsured motor vehicle or any other person or organization jointly or severally liable together with such owner or operator for the accident; and such coverage shall cover the difference, if any, between the sum of such benefits and the damages sustained, up to the maximum amount of such coverage provided under this section. The amount of coverage available under this section shall not be reduced by a setoff against any coverage, including liability insurance. Such coverage shall not inure directly or indirectly to the benefit of any workers’ compensation or disability benefits carrier or any person or organization qualifying as a self-insurer under any workers’ compensation or disability benefits law or similar law.

(2)  The limits of uninsured motorist coverage shall be not less than the limits of bodily injury liability insurance purchased by the named insured, or such lower limit complying with the rating plan of the company as may be selected by the named insured. The limits set forth in this subsection, and the provisions of subsection (1) which require uninsured motorist coverage to be provided in every motor vehicle policy delivered or issued for delivery in this state, do not apply to any policy which does not provide primary liability insurance that includes coverage for liabilities arising from the maintenance, operation, or use of a specifically insured motor vehicle. However, an insurer issuing such a policy shall make available as a part of the application for such policy, and at the written request of an insured, limits up to the bodily injury liability limits contained in such policy or $1 million, whichever is less.

(3)  For the purpose of this coverage, the term “uninsured motor vehicle” shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle when the liability insurer thereof:
(a)  Is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency;
(b)  Has provided limits of bodily injury liability for its insured which are less than the total damages sustained by the person legally entitled to recover damages; or
(c)  Excludes liability coverage to a nonfamily member whose operation of an insured vehicle results in injuries to the named insured or to a relative of the named insured who is a member of the named insured’s household.

(4)  An insurer’s insolvency protection shall be applicable only to accidents occurring during a policy period in which its insured’s uninsured motorist coverage is in effect when the liability insurer of the tortfeasor becomes insolvent within 4 years after such an accident. Nothing herein contained shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided hereunder.

(5)  Any person having a claim against an insolvent insurer as defined in s. 631.54(6) under the provisions of this section shall present such claim for payment to the Florida Insurance Guaranty Association only. In the event of a payment to any person in settlement of a claim arising under the provisions of this section, the association is not subrogated or entitled to any recovery against the claimant’s insurer. The association, however, has the rights of recovery as set forth in chapter 631 in the proceeds recoverable from the assets of the insolvent insurer.

(6)(a)  If an injured person or, in the case of death, the personal representative agrees to settle a claim with a liability insurer and its insured, and such settlement would not fully satisfy the claim for personal injuries or wrongful death so as to create an underinsured motorist claim, then written notice of the proposed settlement must be submitted by certified or registered mail to all underinsured motorist insurers that provide coverage. The underinsured motorist insurer then has a period of 30 days after receipt thereof to consider authorization of the settlement or retention of subrogation rights. If an underinsured motorist insurer authorizes settlement or fails to respond as required by paragraph (b) to the settlement request within the 30-day period, the injured party may proceed to execute a full release in favor of the underinsured motorist’s liability insurer and its insured and finalize the proposed settlement without prejudice to any underinsured motorist claim.
(b)  If an underinsured motorist insurer chooses to preserve its subrogation rights by refusing permission to settle, the underinsured motorist insurer must, within 30 days after receipt of the notice of the proposed settlement, pay to the injured party the amount of the written offer from the underinsured motorist’s liability insurer. Thereafter, upon final resolution of the underinsured motorist claim, the underinsured motorist insurer is entitled to seek subrogation against the underinsured motorist and the liability insurer for the amounts paid to the injured party.
(c)  The underinsured motorist insurer is entitled to a credit against total damages in the amount of the limits of the underinsured motorist’s liability policy in all cases to which this subsection applies, even if the settlement with the underinsured motorist under paragraph (a) or the payment by the underinsured motorist insurer under paragraph (b) is for less than the underinsured motorist’s full liability policy limits. The term “total damages” as used in this section means the full amount of damages determined to have been sustained by the injured party, regardless of the amount of underinsured motorist coverage. Nothing in this subsection, including any payment or credit under this subsection, reduces or affects the total amount of underinsured motorist coverage available to the injured party.

(7)  The legal liability of an uninsured motorist coverage insurer does not include damages in tort for pain, suffering, mental anguish, and inconvenience unless the injury or disease is described in one or more of paragraphs (a)-(d) of s. 627.737(2).

(8)  The provisions of s. 627.428 do not apply to any action brought pursuant to this section against the uninsured motorist insurer unless there is a dispute over whether the policy provides coverage for an uninsured motorist proven to be liable for the accident.

(9)  Insurers may offer policies of uninsured motorist coverage containing policy provisions, in language approved by the office, establishing that if the insured accepts this offer:
(a)  The coverage provided as to two or more motor vehicles shall not be added together to determine the limit of insurance coverage available to an injured person for any one accident, except as provided in paragraph (c).
(b)  If at the time of the accident the injured person is occupying a motor vehicle, the uninsured motorist coverage available to her or him is the coverage available as to that motor vehicle.
(c)  If the injured person is occupying a motor vehicle which is not owned by her or him or by a family member residing with her or him, the injured person is entitled to the highest limits of uninsured motorist coverage afforded for any one vehicle as to which she or he is a named insured or insured family member. Such coverage shall be excess over the coverage on the vehicle the injured person is occupying.
(d)  The uninsured motorist coverage provided by the policy does not apply to the named insured or family members residing in her or his household who are injured while occupying any vehicle owned by such insureds for which uninsured motorist coverage was not purchased.
(e)  If, at the time of the accident the injured person is not occupying a motor vehicle, she or he is entitled to select any one limit of uninsured motorist coverage for any one vehicle afforded by a policy under which she or he is insured as a named insured or as an insured resident of the named insured’s household.

In connection with the offer authorized by this subsection, insurers shall inform the named insured, applicant, or lessee, on a form approved by the office, of the limitations imposed under this subsection and that such coverage is an alternative to coverage without such limitations. If this form is signed by a named insured, applicant, or lessee, it shall be conclusively presumed that there was an informed, knowing acceptance of such limitations. When the named insured, applicant, or lessee has initially accepted such limitations, such acceptance shall apply to any policy which renews, extends, changes, supersedes, or replaces an existing policy unless the named insured requests deletion of such limitations and pays the appropriate premium for such coverage. Any insurer who provides coverage which includes the limitations provided in this subsection shall file revised premium rates with the office for such uninsured motorist coverage to take effect prior to initially providing such coverage. The revised rates shall reflect the anticipated reduction in loss costs attributable to such limitations but shall in any event reflect a reduction in the uninsured motorist coverage premium of at least 20 percent for policies with such limitations. Such filing shall not increase the rates for coverage which does not contain the limitations authorized by this subsection, and such rates shall remain in effect until the insurer demonstrates the need for a change in uninsured motorist rates pursuant to s. 627.0651.

(10)  The damages recoverable from an uninsured motorist carrier in an action brought under s. 624.155 shall include the total amount of the claimant’s damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney’s fees and costs, and any damages caused by a violation of a law of this state. The total amount of the claimant’s damages is recoverable whether caused by an insurer or by a third-party tortfeasor.

History.–s. 1, ch. 61-175; s. 1, ch. 63-148; ss. 13, 35, ch. 69-106; s. 19, ch. 70-20; s. 1, ch. 71-88; s. 182, ch. 71-355; s. 20, ch. 71-970; ss. 3, 4, ch. 73-180; s. 165, ch. 73-333; s. 3, ch. 76-168; s. 3, ch. 76-266; s. 1, ch. 77-457; s. 30, ch. 77-468; s. 1, ch. 78-374; s. 113, ch. 79-40; ss. 2, 3, ch. 79-241; ss. 1, 2, ch. 80-396; ss. 2, 3, ch. 81-318; ss. 544, 563, 809(2nd), ch. 82-243; ss. 66, 79, ch. 82-386; s. 1, ch. 84-41; s. 16, ch. 85-62; s. 7, ch. 86-182; s. 1, ch. 87-213; s. 15, ch. 88-370; s. 2, ch. 89-238; s. 1, ch. 89-243; s. 39, ch. 90-119; ss. 79, 114, ch. 92-318; s. 358, ch. 97-102; s. 1190, ch. 2003-261; s. 30, ch. 2006-12.

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