In a car accident, there are two major risks for damages: damage to a person’s property and damage to other motorists. The Florida financial responsibility law aims to ensure all drivers have minimum insurance protections against these two risks.

Note that PIP is available in

no-fault states

like Florida, whereas

bodily injury liability

coverage is required in

at-fault states

as well.

Florida has high accident rates: Compared to the rest of the United States, the state of Florida experiences higher than average accident rates. In 2022, for example, just under 400,000 crashes were reported in the state. About 41% of those resulted in bodily injury, and 3,281 of those were fatal, according to the

Florida Department of Highway Safety and Motor Vehicles

(FLHSMV).

For drivers involved in those accidents, having both personal injury protection and property damage liability softened the financial blow.

Exceptions to Florida’s insurance requirements

The only way to meet Florida’s responsibility requirements without buying auto insurance is to qualify as a self-insurer.

In order to be self-insured, you must have a net worth of at least $40,000. If you own multiple vehicles, you must have a net worth of $40,000 for the first vehicle and at least $20,000 for every additional vehicle. You may need to submit annual reports to the FLHSMV to prove that you still have enough money to meet your financial responsibility requirements.

Members of the Armed Forces may also qualify for an exemption from the proof of financial responsibility law in Florida.

MORE:

Florida car insurance requirements

What is personal injury protection?

Personal injury protection (PIP)

is required for Florida drivers in possession of a vehicle for over 90 days with a minimum limit of $10,000. For vehicles registered as taxis, the required limits are $125,000 per person and $250,000 per occurrence.

PIP covers 80% of costs for any significant injuries totaling more than $2,500 in damages, regardless of which driver was at fault. The types of damages covered include:

Medical expenses

Disability

Survivor’s loss

Funeral costs

Lost income

Personal injury protection pays out quickly without involving outside insurance companies, which is a great benefit to individuals needing to quickly pay for medical bills and related expenses after a serious accident.

What is property damage liability protection?

The minimum worth of

property damage liability

under the Florida financial responsibility law is $10,000, which is equal to that of PIP. For taxis, the minimum car insurance requirement is $50,000.

As with PIP, property damage liability coverage also applies regardless of who is at fault. It helps pay for the following types of damages to material property:

Vehicle damage

Damage to other structures, such as houses or sheds

Damage to other stationary objects, such as telephone poles or street signs

Damage to lawns or sidewalks

It is possible to carry a higher limit on a property damage liability insurance policy, which comes with a higher premium.

MORE:

What to do if you're in a car accident while uninsured but not at fault in Florida

What are the consequences for not following Florida's financial responsibility law?

Paying out of pocket: If an accident has occurred, the driver could be responsible for paying all damages out of pocket. This can spell financial disaster for the person at fault, incurring risk of losing personal assets or even having to file bankruptcy.

Driving privileges revoked: If no accident occurred but noncompliance with the Florida no-fault financial responsibility law was discovered, the driver’s license plate, tags, and vehicle registration can be

suspended

for up to three years. Once the period of suspension is over, the driver must pay a $15 reinstatement fee and provide proof of insurance for both PIP and property damage liability coverage at the minimum levels.

Higher premiums: Your car insurance rates may skyrocket after a license suspension. You’ll have to

shop for car insurance online

and compare rates to find an affordable premium after your license is reinstated.

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