OLT-Breakroom: PIP/Financial Responsibility confusion

This might be a dumb question but here we go(Its more a confirmation).

The manual states that to comply with the Financial Responsibility Law, the operator of a vehicle needs to have a policy with a minimum of 10/20/10(PAP..correct?).

PIP though, states that it only covers bodily injuries for up to $10K(unless extended by endorsements) and has nothign to do with property damage. PIP is also mandatorty in the state of FL

So..to fully comply with the law, any person that owns a motor vehicle in FL needs to have both: Basic PIP($10K) and PAP for 10/20/10. Am I correct?

Pip is mandatory in florida but as it states in the manual it is added by endorsement . Unfortunately a lot of the things in the Manuel are not like the real world but correct all FLorida policy must be bind with PIP . Now as for BI this is not a requirement, the insured has the option to choose such coverage.

Allende,

There are two separate vehicle laws at work. The 1st is the Florida Financial Responsibility Law. It requires drivers to carry a minimum of 10/20/10 liability for BI and PD for damages for which they are responsibile.

The 2nd law is the No-Fault Law. It requires everyone to carry a minimum of $10,000 coverage for BI, regardless of who is at-fault.

To comply with the law, every driver must have a minimum of 10/20/10 liability (law #1) and $10,000 PIP (law #2).

Jan

There are numerous companies that bind policies without BI, progressive is one example. So why does the manual state their is a law requiring BI coverage when in reality it's not . Things like this May confuse students that already work/bind policies at work .

Stephanie,

Please provide the area (page/section) in the state manual you are referencing. Mandatory BI and PD coverage is required by the Florida Financial Responsibility Law for all vehicles in the state of Florida. Are you referencing this law?

There are numerous areas of the state manual that are different from the day-to-day operations of individual insurance companies. State insurance law is based on countrywide ISO policy standards. Insurance companies are allowed to frame policies and create rate tables as long as they stay within state laws and guidelines.

This can confuse students already working in the industry, but you must learn the state manual materials in order to be licensed.

Jan

I should also add that PIP is also BI coverage and that is required by the No-Fault Law.

Another question I'm Not quit understanding Q: Ralph has a PAP With liablity of 10/20/10 and basic pip with 1k deductible he is running one day and is struck by a pedestrian by a car. A week later he does . Medical bills are 3k and lost wages are 1k how much if any will pop pay in this claim A. 2k B. 2,200 C. 7k D. 7,200 I choose C. Because pip offered 5k for death benefits so 5k plus the 3k in medical bills which is also covered under pip that gives a total of 8k minus the 1k deductible is 7k . The correct answer was D. 7,200 ... I don't understand were the extra $200 came from please explain as I'm not quit sure what I'm doing wrong . Seems like all the mathematical questions I'm getting wrong.

Stephanie,

You're reasoning is correct with one small (but important) detail. You must work PIP deductible questions in this order:

medicals - $3000 -$1000 = $2000 x 80% = $1600

work loss - $1000 X 60% = $600

death benefit - $5000

$1600 + $600 + $5000 = $7200

Always subtract the deductible from the medical expense FIRST and then complete the rest of the math.

I hope this helps!

Jan

Hi Jan,

I know this is an old question but now that I'm already dealing with this in real life, I came back to review some of the old stuff I asked.

I did it specifically because we hear all the time in the street that people say they "only have a PIP" and I remember I had started a discussion about it and wanted to refresh my mind. It turns out I still have questions about such a basic topic.

These are the conclusions I've reached after reading and trying to make sense of it:

So, PIP does not make a policy by itsef, it has to be added to a PAP as an endorsement. The most basic policy that can be written in FL has to comply with both laws, the FR and the No fault.

The FR law requires a minimum of 10/20/10 to pay for damages "to others" in case the insured is liable. The No Fault law, requires a minimum of $10K to pay for the "insureds own" bodily injuries.

These two laws make the the most basic policy in FL is a : 10/20/10 BI and PD liability and 10K PIP, with no comp & colision, MP or UM.

Am I right?

Thanks again!

Allende, I couldn't have said it better! You are absolutely right! Jan

Hi Jan,

PIP coverage provides first party benefits (between the insured and their own insurer) for economic loss, regardless of fault(who caused the crash or injuries). In a state like Florida with the "No-Fault Law", Owners and Drivers subject and in compliance with the law, are not subject to legal liability for causing BI to others, regardless of fault.

What I understand is that, if I'm responsible for an accident causing injuries to another person in another car and both of us have PIP coverage, the other party's insurance will pay for his/her medical payments (up to the PIP limits) regardless that it was my fault. In this case I didn't use my BI coverage thanks to the "No-Fault" Law.

My question is: When does the bodily injury coverage step in?

Thank you for your response.

Andres, BI liability coverage will apply once the PIP limits of $10,000 have been exhausted. So BI will apply on accidents with claims in excess of $10,000. Jan

Property and Casualty -General Lines

PIP/Financial Responsibility confusion