Commonly Used Auto Insurance Terms
Bodily Injury Liability (BI) Coverage
Pays for death or serious and permanent injury to others. Your claim against the at-fault party will be made against their BI coverage, if they have it. It is optional under Florida law.
Property Damage Liability (PD) Coverage
Pays for damages that an insured is legally liable for resulting in the physical damage to, or destruction of, tangible property of another, including loss of use. Florida law requires a minimum of $10,000 of this coverage.
Personal Injury Protection (PIP) Coverage
Pays 80 percent of all necessary and reasonable medical expenses incurred as a result of a covered injury, regardless of who caused the accident. This includes medically necessary medical, surgical, x-ray, dental, and rehabilitative services, including medically necessary ambulance, hospital, and nursing services. Payment is conditioned on an individual receiving initial medical services within 14-days after the motor vehicle accident. Follow-up care may be contingent on the covered person being diagnosed with an emergency medical injury. PIP also pays 60 percent of work loss and a $5,000 death benefit.
Uninsured/Underinsured Motorist (UM) Coverage
Pays for an accidental bodily injury, sickness, or disease, including death, when such an injury is the result of an automobile accident and the at-fault party does not have Bodily Injury (BI) Coverage or has liability limits lower than what is needed. This coverage is optional. If you do not have this coverage, you will most likely be limited to the at-fault party’s BI coverage if they have BI.
Medical Payments (Med Pay) Coverage
Pays reasonable expenses for necessary medical and funeral services due to a bodily injury or death sustained in an automobile accident, regardless of fault. This coverage is optional.
Comprehensive or Other than Collision Coverage
Pays for damage to a vehicle from incidents other than a collision including: fire, theft, windstorm, vandalism or flood. This coverage is optional.
Pays for repair or the actual cash value of the insured’s vehicle if it collides with another vehicle regardless of who causes the accident. If the at-fault party in your accident doesn’t have Property Damage (PD) coverage, you will need to use your collision coverage. This coverage is optional.
Provides reimbursement for automobile rental up to a specified limit shown on the policy. It applies if the insured gets into an accident with their own automobile and can no longer drive it, and usually if the auto is stolen. Some insurance companies will have the insured rent/lease the replacement vehicle and then submit receipts for reimbursement. This coverage is optional.
This means that each party shares some fault (or negligence) for causing the accident. It also means the value of your claim will be reduced by your percentage of fault. For example, if you are found to be 50% at fault your claim would be reduced by 50%. This is a common defense in cases where both parties claim the other party was at fault (i.e. changing into the same lane at the same time and running into each other).
This is the decreased value of your car due to an automobile accident. If another party caused your accident, their insurance company may be responsible for payment for the decreased value of your vehicle.
Examination Under Oath (EUO)
Considered a part of the claim investigation. Your insurance company may request an EUO, but you do not have to give an EUO to the other party’s insurance company. Your attorney should be present during the EUO. Your refusal to cooperate in an EUO by your own insurance carrier could result in the claim being denied.
Independent Medical Exam (IME)
The PIP insurer has a right to request an independent medical exam. An exam may be requested to obtain a second opinion regarding the medical condition or treatment of the patient. If the patient refuses the IME, benefits can be terminated. Sometimes, PIP insurance companies use the results of the IME as a basis to terminate (or stop paying) your PIP benefits.
An insured can elect “not” to have their Uninsured/Underinsured (UM) Coverage limits added together (non-stacked) by signing a non-stacked Uninsured/Underinsured Motorist form, pursuant to Florida Statute 627.727.
Florida law requires that a company add together, or “stack” uninsured/ underinsured (UM) coverage for multiple vehicles, unless otherwise rejected in writing. For example, an insured has three vehicles, and each has a UM limit of 50/100 ($50,000 per person/$100,000 per accident). This means they have up to $150,000 per person/$300,000 per accident available for a claim. The Florida Statute to reference is 627.727.
A vehicle is a total loss when an insurer pays to replace the damaged vehicle with one of like kind and quality or when the owner is paid upon the theft of the vehicle. The definition of a total loss is addressed in Section 319.30, Florida Statutes. This statute is overseen by the Department of Highway Safety & Motor Vehicles and includes directions for submitting the title to a ”total loss vehicle”.
Most applications for insurance ask for information regarding all licensed residents of the insured’s household as well as any individuals that have regular usage of the insured vehicle/s. If this information is not provided on the application and later an undisclosed operator is involved in an accident, the insurer may deny the claim and cancel the contract for material misrepresentation. Some policies cover a permissioned user as long as they don’t live with you or have regular usage of your vehicle/s. You should always check your policy to determine who is covered to use your vehicle/s; there are also policies which cover only the operators listed in the policy.
MVA – motor vehicle accident
DOA – date of accident
DOS – date of service
LOP – letter of protection
PIP – personal injury protection
BI – Bodily Injury
PD – Property Damage
UM – Uninsured or underinsured motorist coverage
EOB – explanation of benefits
EUO – examination under oath
CME – compulsory medical exam
IME – independent medical exam (same as CME)