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How Well Do You Understand Uninsured Motorist Coverage?

According to Florida’s Department of Insurance Fraud, as many as 25 percent of our drivers are uninsured. This gives Florida the dubious distinction of being fifth in the nation in terms of uninsured motorists. As a responsible driver who has auto insurance, you are covered by the personal injury protection (PIP) that is also required by law. Assuming you have at least the minimum insurance of $10,000 in PIP and $10,000 of property damage liability, you are protected from uninsured and underinsured motorists — right? Actually, yes and no.

When you purchase a policy, you are given the option of uninsured/underinsured (UM/UIM) coverage. If you do not choose the coverage, you can’t say it was because of the fine print. By law, policies must include a statement informing you of the consequences of not purchasing uninsured motorist coverage.  And it is in all uppercase, bold-type letters.

Many drivers are also confused about the difference between stacked and nonstacked coverage. In a nutshell:

  • If you opt for stacked coverage, you are insuring more than one car on the same policy. This gives you the advantage of being able to combine the coverage limits you have on each car. So, for example, if you are hit by an uninsured or underinsured motorist and you have two cars, each with a $25,000 UM limit on bodily injury, you will actually have coverage of $50,000.
  • If you have nonstacked coverage, each car, and therefore, each car’s coverage, is treated separately. So, if you have a $25,000 limit UM limit on bodily injury, that is all that is covered.

As of June 2013, a Florida law went into effect with the intention of making sure that when you purchase insurance, you understand the limitations of non-stacking coverage in relation to UM insurance. Specifically, the law states that by opting for a nonstacking policy, you are doing so in an informed manner, with “knowing acceptance of limitations on behalf of all insureds.”

If you are not sure whether you have the protection you need in case of a car accident with an uninsured motorist, a lawyer can help review your options.

Attorney Shane Herbert also contributed to this post.

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