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Rejected coverage can haunt driver


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Question: I live in Florida and have PIP as required.  I was involved in a car accident where I was rear-ended. My insurance company says I have a deductible due for my PIP benefits and that I declined the lost wages portion of my PIP so I can’t claim for that. Is this possible?  

Answer: Yes, you may have rejected work loss and chosen a deductible in an effort to reduce your insurance premium.

As you are aware, Florida requires drivers to carry no-fault insurance, in the form of personal injury protection (PIP) coverage, of at least $10,000 and property damage liability coverage of $10,000. 

Bodily injury liability coverage isn’t required to register your car, but it can be required in certain circumstances under the state’s financial responsibility law.  Due to this, we always recommend carrying at least the minimums allowed in Florida of $10,000 per person and $20,000 per accident of bodily injury liability coverage. (See “What you need to know about Florida car insurance” for detailed information)

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When purchasing or renewing a Florida auto insurance policy, car insurance companies are instructed by state law (Florida statute 627.739) to offer options that can help you reduce the premium related to the PIP portion.  This includes the ability to decline work loss coverage and the option to choose a deductible.

The law says that Florida auto insurance providers should offer you the option of choosing a deductible of $250, $500 or $1,000 for your PIP coverage.  Choosing a deductible for your Florida PIP coverage doesn’t reduce your $10,000 limit.  Instead, you’re required to pay the deductible amount before your PIP benefits kick in.

When you choose a deductible option, your premiums should be reduced, since you’re taking on some of the risk by paying out for a portion of your medical expenses. 

Florida car insurance companies must also offer you the option to exclude PIP benefits for loss of gross income and loss of earning capacity (typically referred to as loss of income benefits). 

Did you know that you declined the coverage?

State law notes that when an insurer offers a policyholder the option to exclude loss of income benefits that it should be in “clear and unambiguous language” at the initial inception of the policy and at each annual renewal.  The notice should also indicate how much the premium reduction is due to taking this option. 

Thus, you should have received notice that you chose to decline lost wages as a PIP benefit for a discounted car insurance rate.  It should specifically state as part of the notice:

The named insured is advised not to elect the lost wage exclusion if the named insured or dependent resident relatives are employed, since lost wages will not be payable in the event of an accident.

When a motorist chooses the option of excluding loss of income benefits and/or a deductible for the benefits, the individual must decide if the exclusions will just apply to the named insured or the named insured along with dependent resident relatives.

Look at your policy, particularly your declarations page, to see what is shown in regards to your PIP coverage.  It should indicate that you excluded loss wages benefits and chose a deductible amount.

If you can’t find information showing that you chose the exclusion and deductible, then ask your insurer for proof.  If it can’t provide you with proof, or you have issues regarding his situation with your car insurance company, then contact the Florida insurance regulator’s office for consumer help.

Use this situation as a reminder to always check your policy when it comes in. If you don’t understand something listed or if you see something you need altered, you can contact your car insurance company immediately to fix the concern before an issue like this arises. (See “5 things to double-check on your policy”)

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